STMicroelectronics Reports 2017 Third Quarter and Nine Months Financial Results

  • Third quarter net revenues of $2.14 billion, up 11.1% sequentially and 18.9% year-over-year
  • Third quarter gross margin of 39.5%, up 120 basis points sequentially, driving operating margin before impairment and restructuring(1) to 13.7%
  • First nine months net revenues up 15.0% to $5.88 billion, net income of $494 million and free cash flow(1) of $194 million
  • ST re-entered the CAC 40 Euronext Paris Index 

Geneva, October 26, 2017 - STMicroelectronics (NYSE: STM), a global semiconductor leader serving customers across the spectrum of electronics applications, reported financial results for the third quarter and nine months ended September 30, 2017.

Third quarter net revenues totaled $2.14 billion, gross margin was 39.5%, and net income was $236 million, or $0.26 per share.

"In the third quarter we achieved a number of important milestones: quarterly revenues exceeded $2.1 billion, up almost 19% year-over-year; gross margin was 39.5% and operating margin before impairment and restructuring was 13.7%," said Carlo Bozotti, STMicroelectronics President & CEO.

"All product groups recorded double-digit year-over-year revenue growth, driven by strong demand across all geographies in our focus application areas of Internet of Things, Smartphones, Industrial and Smart Driving.

"ST's transformation, focused on sustainable revenue growth across our entire portfolio, is taking shape, driven by our technologies, products, people and diversified customer base. We are determined to continue on this growth and innovation trajectory, underpinned by a solid financial position and enhanced liquidity."

Quarterly Financial Summary (US$ Million)

U.S. GAAP Q3 2017 Q2 2017 Q3 2016
Net Revenues 2,136 1,923 1,797
Gross Margin 39.5% 38.3% 35.8%
Operating Income 278 178 90
Net Income attributable to parent company 236 151 71
Net cash from operating activities 463 369 332

Non-U.S. GAAP (1) Q3 2017 Q2 2017 Q3 2016
Operating Income before impairment and restructuring charges 292 184 119
Free cash flow 80 52 102
Net financial position 446 524 464

(1) Non-U.S. GAAP measure. See Appendix for reconciliation to U.S. GAAP and additional information explaining why the Company believes these measures are important.

Quarterly Financial Summary By Product Group (US$ Million)

Net Revenues By Product Group Q3 2017 Q2 2017 Q3 2016
Automotive and Discrete Group (ADG) 775 755 704
Analog and MEMS Group (AMG) 502 482 403
Microcontrollers and Digital ICs Group
701 612 587
Others (a) 158 74 103
Total 2,136 1,923 1,797

(a) Net revenues of "Others" includes revenues from sales of Imaging Product Division, Subsystems, assembly services, and other revenue.

Third Quarter Review

Third quarter net revenues increased 11.1% sequentially, a better than seasonal performance and 210 basis points higher than the mid-point of the Company's guidance. On a sequential basis, Microcontrollers and Digital ICs Group (MDG) revenues were up 14.6%, led by general purpose microcontrollers which again posted record quarterly sales. Analog and MEMS Group (AMG) and Automotive and Discrete Group (ADG) also grew on a sequential basis, up 4.2% and 2.6%, respectively. Imaging Product Division revenues, reported in Others, registered a triple-digit sequential revenue growth reflecting the initial ramp in wireless applications of ST's new program, including the Company's Time-of-Flight and new specialized imaging technologies.

On a year-over-year basis, third quarter net revenues increased by 18.9% on double-digit growth across all product groups and strong traction with new products. Analog and MEMS Group (AMG) third quarter revenues grew 24.8% year-over-year due to a sharp recovery in Analog and strong growth in MEMS.   Microcontrollers and Digital ICs Group (MDG) revenues increased 19.4% on very strong growth for general purpose microcontrollers, in part offset by lower sales of businesses undergoing phase-out. Automotive and Discrete Group (ADG) third quarter revenues increased 10.0% compared to the year-ago quarter on strong results for both Automotive and Power Discrete. Imaging Product Division third quarter revenues increased very significantly year-over-year.

By region of shipment, revenues grew by double-digits on a sequential basis across all regions. Specifically, Americas revenues grew by 14.5%, Asia Pacific increased by 10.8%, and EMEA was up by 10.0%. On a year-over-year basis, EMEA revenues were up by 24.9%, Asia Pacific increased by 19.4% and the Americas grew by 6.4%.

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