STMicroelectronics stock surges on healthy full-year outlook

payment card
STMicroelectronics just began releasing its next-gen e-payment SoC and today forecast a healthy finish to 2019, which investors liked. (STMicroelectronics)

Geneva-based STMicroelectronics on Thursday predicted a healthy financial outlook for the full year, prompting a 7% bump in its stock price.

For the third quarter, the company saw a 1.2% increase in net revenues compared to a year ago but posted an 18% decline in net income.

CEO Jean-Marc Chery called the company’s auto and industrial segment “soft” but noted that third quarter revenues were up 17% from the prior quarter.

Sponsored by Infosys

In Conversation with Antonio Neri, President & CEO – Hewlett Packard Enterprise & Salil Parekh, CEO – Infosys

Hear the CEOs of Infosys & HPE discuss the current crisis and how it has accelerated the need for digital transformation for their clients. Connectivity at the Edge, right mix of hybrid cloud, ability to extract data faster than ever before… these are just some of the contributions that HPE and Infosys make to our clients’ digital transformation journey.

He predicted the fourth quarter revenues will grow by 5% over the third quarter, or about 1.2% over the final quarter of 2018.  Revenues for all of 2019 are anticipated to reach $9.48 billion with a double-digit operating margin.

The full year forecast provoked investors to buy the stock in early trading on the NYSE, prompting a 7.5% surge in the stock price to $22.04.

STMicroelectronics makes a wide range of electronics products used by 100,000 customers globally. It recently began shipping samples of its next-gen system-on-chip for electronic payments called STPay-Topaz.

RELATED: STMicroelectronics samples next-gen payments SoC

Net revenue for the third quarter was $2.553 billion, up from $2.522 billion in the same quarter a year ago. Net income was $302 million, down 18% from $369 million a year earlier.

The company said it recorded higher sales in products for imaging, analog, power discrete and MEMS, which were largely offset by lower sales for digital integrated circuits, automotive and microcontroller sales.

Auto is folded into power discrete in the way the company reports revenues by product group, so while auto declined, power discrete improved although exact figures were not reported. However, when combined, the auto and power discrete group saw a big operating profit decline of 34.5% to $76 million. 

Suggested Articles

Revenues overall hit $3.82 billion, up 1% from third quarter of 2019, as auto plants reopened and personal electronics revenues grew

MIT Sloan and Boston Consulting Group call for expanding organizational learning to gain better financial rewards of AI deployments

Originally a 1960s memory manufacturer, Intel wants out of NAND following the market decline in 2018