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STMicroelectronics Q4 Profit, Revenues Top View; Sees Q1 Revenues Above Market

stmicroelectronics jan23 lt

Semiconductor company STMicroelectronics NV (STM) reported Thursday lower profit in its fourth quarter with weak margin, despite higher revenues. Earnings per share and revenues were above market estimates. Looking ahead for the first quarter, the company projects higher revenues above analysts' estimates.

Further, for 2020, the company plans to invest about $1.5 billion in CAPEX to support strategic initiatives and revenue growth to progress towards mid-term revenue ambition of $12 billion.

In pre-market activity on the NYSE, STM shares were gaining around 5.6 percent to trade at $29.98.

For the fourth quarter, net income declined 6.2 percent to $392 million or $0.43 per share from last year's $418 million or $0.46 per share.

On average, seven analysts polled by Thomson Reuters expected earnings of $0.37 per share. Analysts' estimates typically exclude special items.

Operating margin fell 10 basis points to 16.7 percent. Gross margin declined 70 basis points to 39.3 percent from 40 percent last year, mainly impacted by price pressure and unsaturation charges.

Fourth- quarter net revenues, however, grew 4 percent to $2.75 billion from $2.65 billion a year ago. Analysts expected revenues of $2.68 billion.

A 4.5 percent drop in Automotive and Discrete Group revenues were more than offset by 10 percent rise in Analog, MEMS and Sensors revenues and 7.6 percetn increase in Microcontrollers and Digital ICs revenues.

For the first quarter, the company expects net revenues at the mid-point of $2.36 billion, representing a year-over-year increase of 13.7 percent and a sequential decline of 14.3 percent. Gross margin is expected to be 38.0 percent, plus or minus 200 basis points.

Analysts expect first-quarter revenues of $2.25 billion.

STM shares closed Wednesday's regular trading at $28.39, up 2.23 percent.

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