STMicroelectronics Reports 2025 First Quarter Financial Results

Core Insights - STMicroelectronics reported a significant decline in financial performance for Q1 2025, with net revenues of $2.52 billion, a decrease of 27.3% year-over-year and 24.2% quarter-over-quarter [3][5][6] - The gross margin fell to 33.4%, down 830 basis points from the previous year, primarily due to product mix and higher unused capacity charges [3][8] - Operating income plummeted to$ 3 million, a 99.5% decrease compared to the same quarter last year, resulting in an operating margin of only 0.1% [3][9] Financial Performance - Net Revenues: $2,517 million in Q1 2025, down from$ 3,321 million in Q4 2024 and $3,465 million in Q1 2024 [3][7] - **Gross Profit**:$ 841 million, a decrease of 41.7% year-over-year [8] - Operating Income: $3 million, down from$ 551 million in Q1 2024 [9] - Net Income: $56 million, an 89.1% decline from$ 513 million in the previous year [3][9] - Diluted Earnings Per Share: $0.06, compared to$ 0.54 in Q1 2024 [3][9] Segment Performance - Analog, Power & Discrete, MEMS and Sensors (APMS): Net revenues of $1,466 million, down 28.0% year-over-year [7] - **Embedded Processing (EMP)**: Net revenues of$ 742 million, a decrease of 29.1% year-over-year [7] - RF & Optical Communications (RF&OC): Net revenues of $306 million, down 19.2% year-over-year [7] Business Outlook - The company anticipates Q2 2025 net revenues of$ 2.71 billion, representing a sequential increase of 7.7% but a year-over-year decrease of 16.2% [5][21] - Gross margin is expected to remain around 33.4%, impacted by unused capacity charges [6][21] - The company is on track with a program to reshape its manufacturing footprint and aims for annual cost savings in the high triple-digit million-dollar range by the end of 2027 [5][17] Cash Flow and Financial Position - Net Cash from Operating Activities: $574 million, down 51.5% from$ 859 million in Q1 2024 [13] - Free Cash Flow: Positive at $30 million, compared to negative$ 134 million in the previous year [14] - Net Capex: $530 million in Q1 2025, down from$ 967 million in Q1 2024 [14] - Inventory: Increased to $3.01 billion, with days sales of inventory at 167 days [15] Corporate Developments - The company has made adjustments to its segment reporting effective January 1, 2025, to optimize resources and implement synergies [4][43] - STMicroelectronics is focused on innovation and cost management to enhance competitiveness in a challenging market environment [6][17]