Core Viewpoint - STMicroelectronics N.V. has revised its revenue and margin projections for 2024 downward for the second time this fiscal year, indicating potential issues in its business performance and raising concerns about possible securities fraud or unlawful practices by the company and its executives [2][1]. Financial Performance - For the full year 2024, STMicroelectronics now anticipates total revenue to be between $13.2 billion and $13.7 billion, a significant reduction from the previous forecast of $14 billion to $15 billion [2]. - In January 2024, during the fourth quarter earnings call, the company had projected revenues for 2024 to be between $15.9 billion and $16.9 billion, highlighting a drastic change in expectations [2]. - The second quarter revenue for 2024 was reported at $3.23 billion, reflecting a year-over-year decline of 25.3% [2]. - Net sales to original equipment manufacturers decreased by 14.9% year-over-year, while sales through distribution channels saw a decline of 43.7% year-over-year [2]. Market Reaction - Following the announcement of the revised projections, STMicroelectronics' stock price fell by $6.07 per share, or 15.35%, closing at $33.47 per share on July 25, 2024 [3].

Financial Data and Key Metrics Changes - In Q2 2024, net revenues decreased by 25.3% year-over-year to $3.23 billion, primarily due to declines in industrial and automotive sectors [39][41] - Gross margin fell to 40.1% from 49% in the same quarter last year, while operating margin decreased to 11.6% from 26.5% [39][66] - Net income dropped 64.8% to $353 million compared to $1 billion in the previous year [45][66] - For Q3 2024, the company expects net revenues of approximately $3.25 billion, representing a year-over-year decline of 26.7% [99] Business Line Data and Key Metrics Changes - Analog products, MEMS, and Sensors decreased by 10% year-over-year, while Power and Discrete products fell by 24.4% [42] - Microcontrollers revenues declined by 46%, mainly due to general-purpose microcontrollers [42] - Digital ICs and RF products saw a decline of 7.6%, with a decrease in ADAS offsetting an increase in RF Communications [42] - For Q3, automotive is expected to grow 4% sequentially, while industrial is projected to decrease by 17% [9][10] Market Data and Key Metrics Changes - Year-over-year sales to OEMs decreased by 14.9% and by 43.7% to distribution [43] - Industrial market is experiencing a significant downturn, with a decline of more than 50% year-over-year [64] - Automotive market is down about 15% year-over-year, while Personal Electronics decreased by about 6% [64] Company Strategy and Development Direction - The company is focusing on car electrification and has secured multiple wins in Power Discrete technologies for traction inverters [48] - There is a commitment to convert to 300-millimeter and 200-millimeter production processes, which is deemed mandatory for future growth [14] - The company is building a silicon carbide campus to enhance its manufacturing capabilities [74] Management's Comments on Operating Environment and Future Outlook - Management noted a longer and more pronounced correction in the industrial sector than anticipated, driven by weakening end demand and inventory corrections [72] - The automotive sector is expected to grow in H2 2024, particularly in components related to electric vehicles, despite a decline in legacy automotive forecasts [89] - The semiconductor cycle is impacted by desynchronization in end markets and inventory adjustments, with a shift from tension to excess capacity [54] Other Important Information - The company announced a new share buyback plan totaling up to $1.1 billion to be executed over three years [68] - A Capital Markets Day is scheduled for November 20 in Paris to provide further updates [55] Q&A Session All Questions and Answers Question: What is the outlook for the automotive and industrial sectors? - Management indicated that automotive demand has weakened, with a decline in legacy business forecasts impacting revenue [86][88] - The industrial sector is facing a significant downturn, with inventory corrections expected to take longer than previously thought [72][84] Question: How is the company addressing the current pricing environment? - The pricing environment remains stable, with low single-digit declines expected [78][80] Question: What are the expectations for operational expenses in the coming quarters? - The company anticipates operational expenses to be between $905 million and $915 million for Q3, maintaining strict control over costs [30][149]

Core Insights - STMicroelectronics reported second quarter net revenues of $3.23 billion, a gross margin of 40.1%, an operating margin of 11.6%, and a net income of $353 million or $0.38 diluted earnings per share [5][28][29] Financial Performance - Net revenues decreased by 25.3% year-over-year, with sales to OEMs and Distribution down by 14.9% and 43.7% respectively [4][28] - Sequentially, net revenues fell by 6.7%, which was 90 basis points better than the midpoint of ST's guidance [4][6] - Gross profit totaled $1.30 billion, reflecting a year-over-year decrease of 38.9% [8][29] - Operating income decreased by 67.3% to $375 million, with an operating margin of 11.6%, down from 26.5% in the previous year [30][33] Segment Performance - The Analog products, MEMS and Sensors (AM&S) segment saw a revenue decrease of 10.0% year-over-year [31] - The Power and Discrete products (P&D) segment experienced a revenue decline of 24.4% [32] - The Microcontrollers (MCU) segment reported a significant revenue drop of 46.0% [6][29] Cash Flow and Financial Position - Net cash from operating activities was $702 million, down from $1.31 billion in the same quarter last year [11][34] - Free cash flow was $159 million, compared to $209 million in the prior year [12][34] - As of June 29, 2024, ST's net financial position was $3.20 billion, with total liquidity of $6.29 billion and total financial debt of $3.09 billion [36][79] Business Outlook - For the third quarter, ST expects net revenues of $3.25 billion, a decrease of 26.7% year-over-year, but a slight increase of 0.6% sequentially [6][14] - Gross margin is anticipated to be around 38%, impacted by approximately 350 basis points of unused capacity charges [6][14] Organizational Changes - On January 10, 2024, ST announced a new organizational structure that will change segment reporting starting Q1 2024 [3][68]

PR N°C3270C STMicroelectronics Announces Status of Common Share Repurchase Program Disclosure of Transactions in Own Shares – Period from Jul 01, 2024 to Jul 05, 2024 AMSTERDAM – July 8, 2024 -- STMicroelectronics N.V. (the "Company" or "STMicroelectronics"), a global semiconductor leader serving customers across the spectrum of electronics applications, announces full details of its common share repurchase program (the "Program") disclosed via a press release dated June 21, 2024. The Program was approved b ...

STMicroelectronics Announces Completion of its 2021 Share Buy-back Programs and Launch of a new 3 Year $1,100 million Share Buy-Back Plan in 2024 The Completed Buy-Backs were carried out, and the New Buy-Backs will be carried out, in accordance with the authorization of the Supervisory Board and the provisions of the Market Abuse Regulation (EU) 596/2014 (the "Market Abuse Regulation") and Commission Delegated Regulation (EU) 2016/1052. The Completed Buy-Backs were launched on July 1, 2021 and their duratio ...

PR N° C3267C The Completed Buy-Backs were launched on July 1, 2021 and their duration was approximately 3 years. The actual timing, number and value of Company shares repurchased under the New Buy-Backs will depend on a number of factors, including market conditions, general business conditions and applicable legal requirements. The Company is not obligated to carry out either of the share buy-back programs, and, if commenced, either share buy-back program may be suspended and discontinued at any time, for ...

New starting point for all edge-AI projects gathers tools, software and resources in one place for faster, smoother developer experience The ST Edge AI Suite is an integrated collection of software tools, designed to facilitate the development and deployment of embedded AI applications. This comprehensive suite supports both optimization and deployment of machine-learning algorithms, starting from data collection to final deployment on hardware, streamlining the workflow for different types of users. "ST Ed ...

Geely Auto Gears up NEV Transformation and Innovation with Long-Term SiC Supply Agreement and Joint Lab with STMicroelectronics Beijing, China, June 4, 2024 – STMicroelectronics (NYSE:STM), a global semiconductor leader serving customers across the spectrum of electronics applications, and Geely Auto Group (HKEX: HK0175), a global leading automobile and new energy vehicle (NEV) manufacturer, today announced they have signed a long- term Silicon Carbide (SiC) supply agreement to accelerate their existing coo ...

PR N° C3262C STMicroelectronics to build the world's first fully integrated silicon carbide facility in Italy Geneva, Switzerland, May 31, 2024 – STMicroelectronics (NYSE:STM), a global semiconductor leader serving customers across the spectrum of electronics applications, announces a new high-volume 200mm silicon carbide ("SiC") manufacturing facility for power devices and modules, as well as test and packaging, to be built in Catania, Italy. Combined with the SiC substrate manufacturing facility being rea ...

PR N° C3262C STMicroelectronics to build the world's first fully integrated silicon carbide facility in Italy The new facility is targeted to start production in 2026 and to ramp to full capacity by 2033, with up to 15,000 wafers per week at full build-out. The total investment is expected to be around five billion euros, with a support of around two billion euros provided by the State of Italy within the framework of the EU Chips Act. Sustainable practices are integral to the design, development, and opera ...