STMicro nearly doubles quarterly profit, sees Q4 sales exceeding $4 billion
STM•STMicroelectronics reported third-quarter operating income excluding one-off charges of $429 million, nearly double the year-earlier figure and above analysts’ $400.5 million estimate. It expects fourth-quarter revenue of $4.15 billion, give or take 3.5%, and gross margin of about 39%.
1. Profit beats expectations
STMicroelectronics reported third-quarter operating income excluding one-off charges of $429 million, nearly double the year-earlier figure and above the $400.5 million expected by analysts polled by LSEG. Higher sales of communication equipment, computer peripherals and personal electronics helped drive the beat.
2. Fourth-quarter outlook
The company expects fourth-quarter revenue of $4.15 billion, give or take 3.5%, compared with $3.76 billion in the third quarter. It had said in July that fourth-quarter sales would exceed $4 billion. CEO Jean-Marc Chery said AI data centre demand and low-Earth-orbit satellite communications were adding to the cyclical recovery.
3. Margins and growth
Third-quarter gross margin rose to 37.3% from 33.2% a year earlier, helped by a higher share of sales from more profitable chips and lower costs from idle factory capacity. STMicro expects gross margin of about 39% in the fourth quarter. Jefferies analysts expect data centre revenue to roughly double from this year to next year and see more significant gross-margin upside toward the end of next year.
