STMicroelectronics Cuts Guidance Again Amid Slow Automotive Market
By Mauro Orru
STMicroelectronics slashed its sales and margin forecasts for the year again as it continues to face lackluster demand for chips from the automotive industry.
The European chip maker said it now expects revenue of $13.2 billion to $13.7 billion this year compared with a previous range of $14 billion to $15 billion. Meanwhile, its gross margin is now expected at about 40% compared with a previous forecast in the low 40s.
Revenue slumped more than 25% on year to $3.23 billion in the second quarter. Analysts had forecast revenue of $3.20 billion, according to consensus estimates compiled by Visible Alpha.
"During the quarter, contrary to our prior expectations, customer orders for industrial did not improve and automotive demand declined," said Chief Executive Jean-Marc Chery.
STMicroelectronics posted a net profit of $353 million compared with $1 billion a year earlier. Gross profit--a closely watched metric for companies operating in the semiconductor industry--plunged to $1.30 billion from $2.12 billion, generating a 40.1% gross margin.
Analysts had forecast a net profit of $323.1 million and a gross profit of $1.28 billion, according to the Visible Alpha consensus.
For the current quarter, STMicroelectronics expects revenue of $3.25 billion and a gross margin of 38%.
Write to Mauro Orru at mauro.orru@wsj.com
(END) Dow Jones Newswires
July 25, 2024 01:36 ET (05:36 GMT)
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