STMicroelectronics Reports 2017 Second Quarter, First Half Financial Results

STMicroelectronics reported financial results for the second quarter and first half ended July 1, 2017. Second quarter net revenues totaled $1.92 billion, gross margin was 38.3%, and net income was $151 million, or $0.17 per share.
 
“It was another solid quarter, with both net revenues and gross margin sequentially performing better than seasonality and above the mid-point of our guidance,” said Carlo Bozotti, STMicroelectronics president and CEO.
 
“On a year-over-year basis, revenue growth came from all product groups and sales channels. In Internet of Things and smartphones, we continue to win with our complete portfolio of microcontrollers, sensors, analog and power management, connectivity and security solutions,” Bozotti noted. “In Smart Driving, we continue to capture opportunities both with products developed in our Automotive and Discrete Group, as well as from the rest of our organization which fit the needs of our automotive customers, such as sensors and general purpose analog.”
 
Second quarter net revenues increased 5.6% sequentially, a better than seasonal performance and 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% on growth across all product groups and strong traction with new products. Analog and MEMS Group (AMG) second quarter revenues grew 28.3% year-over-year.
 
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. Operating income of $178 million in the second quarter increased by $49 million and $150 million compared to the prior and year-ago quarter, respectively.
 
Net revenues in the first half 2017 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). By product group, first half 2017 Analog and MEMS Group (AMG) revenues were up 24.1%.
 
Gross margin in the first half 2017 improved to 38.0% from 33.6% in the year-ago period. Operating income in the first half of 2017 improved significantly by $312 million to $307 million compared to the prior period.
 
First half of 2017 net income, as reported, 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. Free cash flow was $113 million.
 
ST’s total financial resources equaled $1.99 billion and total financial debt was $1.47 billion at July 1, 2017.