STMicroelectronics Reports 2024 Second Quarter Financial Results

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]