STMicroelectronics reports solid first-half results for 2017

Semiconductor company STMicroelectronics has reported its financial results for the second quarter and first half of 2017, ending 1 July.

Second-quarter net revenues for the company totalled $1.92 billion, while net income was $151 million ($0.17 per share). Second-quarter net revenues increased 5.6% sequentially, 60 basis points higher than the midpoint of the company’s guidance.

On a year-over-year basis, second-quarter net revenues increased by 12.9%, with growth across all product groups and strong traction with new products. Second-quarter gross profit was $736 million and gross margin was 38.3%, 20 basis points above the midpoint of the company’s guidance. On a sequential basis, gross margin increased 70 basis points.

“It was another solid quarter, with both net revenues and gross margin sequentially performing better than seasonality and above the midpoint of our guidance,” said STMicroelectronics President and CEO Carlo Bozotti.

Net revenues in the first half of 2017 meanwhile increased 12.9% to $3.74 billion from $3.32 billion in the first half 2016, or 14.1% excluding businesses undergoing a phase-out (mobile legacy products and set-top box). Net income was $258 million — equivalent to $0.28 per share — compared to a net loss of $18 million, or negative $0.02 per share, in the first half of 2016.

The 2017 first-half gross margin improved by 440 basis points to 38% from 33.6% one year ago, the company said. The margin was said to benefit from manufacturing efficiencies, product mix and lower unused capacity charges partially offset by normal price pressure, according to the company.

“Based on current booking activity and visibility on our anticipated key new program, we expect third-quarter revenues to increase about 9% on a sequential basis, representing year-over-year growth of about 16.6% at the midpoint of our guidance range,” Bozotti said. “We anticipate another quarter of margin expansion with third-quarter gross margin of about 39% at the midpoint, leading to strong year-over-year improvement in operating and net income.

“Overall, we believe we are very well positioned to reach the short-term financial targets we outlined for the second half of 2017 at our Capital Markets Day held in May.”