July 25, 2024 - $STMicroelectronics (STM.US)$shares dropped 10.22% to $35.50 in pre-market trading on Thursday. The company has reported U.S. GAAP financial results for the second quarter ended June 29, 2024.

Jean-Marc Chery, ST President & CEO, commented:

• “Q2 net revenues were above the midpoint of our business outlook range driven by higher revenues in Personal Electronics, partially offset by lower than expected revenues in Automotive. Gross margin was in line with expectations.”

• “First half net revenues decreased 21.9% year-over-year, mainly driven by a decrease in Microcontrollers and Power and Discrete segments. Operating margin was 13.8% and net income was $865 million.”

• “During the quarter, contrary to our prior expectations, customer orders for Industrial did not improve and Automotive demand declined.”

• “Our third quarter business outlook, at the mid-point, is for net revenues of $3.25 billion, decreasing year-overyear by 26.7% and increasing sequentially by 0.6%; gross margin is expected to be about 38%, impacted by about 350 basis points of unused capacity charges.”

• “We will now drive the Company based on a plan for FY24 revenues in the range of $13.2 billion to $13.7 billion. Within this plan, we expect a gross margin of about 40%.”

Business Outlook

ST’s guidance, at the mid-point, for the 2024 third quarter is:

• Net revenues are expected to be $3.25 billion, an increase of 0.6% sequentially, plus or minus 350 basis points.

• Gross margin of 38%, plus or minus 200 basis points.

• This outlook is based on an assumed effective currency exchange rate of approximately $1.07 = €1.00 for the 2024 third quarter and includes the impact of existing hedging contracts.

• The third quarter will close on September 28, 2024.