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STMicroelectronics Stock Up As Q4 Results Beat Estimates; Warns On Q1 Revenues

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Shares of STMicroelectronics NV (STM) were gaining around 5 percent in Paris and Italy after the Geneva-based semiconductor company on Thursday reported higher earnings and revenues in its fourth quarter, above market estimates. Gross margin, meanwhile, was lower than last year. Further, the company warned on its first-quarter revenues.

Jean-Marc Chery, STMicroelectronics President & CEO, said, "For 2019 our key objectives are to continue outperforming our served market, to balance our end market and application focus and to execute on our strategic technology, R&D and manufacturing programs. Therefore, we expect to invest between $1.2 to $1.3 billion in CAPEX."

For the first quarter, the company projects net revenues of about $2.1 billion at the mid-point, decreasing year-over-year by about 5.7 percent.

On average, analysts polled by Thomson Reuters expect revenues of $2.38 billion for the quarter. Analysts' estimates typically exclude special items.

Sequentially, the first-quarter revenues represent a decrease of about 20.7 percent, reflecting the combined impact of increased unfavorable dynamics in some of the end markets along with normal first quarter seasonality. From a profitability perspective, gross margin is expected to be about 39 percent at mid point, plus or minus 200 basis points

For the fourth quarter, net income climbed 35.4 percent to $418 million or $0.46 per share from last year's $308 million or $0.34 per share.

Net revenues increased 7.4 percent to $2.65 billion from $2.47 billion a year ago.

Analysts expected earnings of $0.44 per share on revenues of $2.64 billion for the quarter.

Net revenues and operating income increased sequentially 5 percent and 11.5 percent, respectively.

Gross margin was 40 percent, down from last year's 40.7 percent. Operating margin was 16.8 percent, up from 16.7 percent a year ago.

Net revenues in 2018 increased 15.8 percent year-over-year led by Imaging, Automotive and Power Discrete.

In Paris, ST shares were trading at 13.21 euros, up 5.68 percent. In Italy, the shares were up 5.44 percent at 13.18 euros.

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