STMicroelectronics Maintained a Solid Level of Profitability in Q1 2019
STMicroelectronics reported the U.S. GAAP financial results for the first quarter of 2019, which ended March 30. For the quarter, STMicroelectronics reported that net revenues declined to $2.08 billion, down 6.7% from the same period of 2018.
The company posted a gross margin of 39.4% and an operating margin of 10.2%. Net income for the quarter reached $178 million or $0.20 diluted earnings per share.
STMicroelectronics recorded lower sales of Microcontrollers / Memories, Analog and Imaging. These lower sales were partially offset by growth in Power Discrete, Automotive, Digital, and MEMS product groups.
Year-over-year sales to OEMs decreased by 2.4% and sales to distribution decreased 13.9%. Compared to the fourth quarter of 2018. Net revenues also decreased 21.6%, 90 basis points lower than the mid-point of the company's guidance.
Automotive and Discrete Group
Revenues increased in both Automotive and Power Discrete product groups. Operating profit in the Automotive and Discrete group increased by 6.2% to $95 million. Operating margin for the Automotive and Power Discrete groups was 10.6% compared to 11.0% in the period of the previous year.
Analog, MEMS, and Sensors Group
Revenue grew in MEMS, while both Analog and Imaging decreased double-digits. Operating profit for the Analog, MEMS, and Sensors Group (AMS) decreased by 33.4% to $43 million. Operating margin was 7.8% compared to 9.8% for the first quarter of 2018.
Microcontrollers and Digital ICs Group
Revenue grew in Digital ICs, while Microcontrollers / Memories decreased double-digits. Operating profit for the for the Microcontrollers and Digital ICs Group (MDG), decreased by 43.6% to $83 million. Operating margin was 13.4% compared to 19.5%.
Jean-Marc Chery, STMicroelectronics President & CEO, commented, "In the first quarter of 2019, revenues and gross margin performed as anticipated, amid softened market dynamics. We maintained a solid level of profitability, with operating margin above 10% and net income of $178 million.
"Looking at the second quarter, we plan to return to sequential revenue growth. Our second quarter outlook, at the mid-point, is for net revenues to increase about 2.4%; gross margin is expected to be about 38.5%.
He added, "For the full year 2019, we expect net revenues to be in the range of about $9.45 to $9.85 billion. We, therefore, plan for strong sequential growth in the second half of the year compared with the first half, across the industrial, automotive and personal electronics end markets. Our revenue expectation is taking into account engaged customer programs, new product introductions, and assumes improving market conditions."
"Our objectives in 2019 are to outperform our served market and to deliver sustainable profitability," he concluded.