01.25.24
STMicroelectronics N.V. reported U.S. GAAP financial results for the fourth quarter ended Dec. 31, 2023.
ST reported fourth quarter net revenues of $4.28 billion, gross margin of 45.5%, operating margin of 23.9%, and net income of $1.08 billion or $1.14 diluted earnings per share.
“FY23 revenues increased 7.2% to $17.29 billion,” said Jean-Marc Chery, ST president and CEO. “Operating margin was 26.7% compared to 27.5% in FY22 and net income increased 6.3% to $4.21 billion. We invested $4.11 billion in net CAPEX while delivering free cash flow of $1.77 billion.
“In Q4, ST delivered revenues and gross margin slightly below the mid-point of the guidance, with higher revenues in Personal Electronics offset by a softer growth rate in Automotive,” Chery said. “In Q4, our customer order bookings decreased compared to Q3. We continued to see stable end-demand in Automotive, no significant increase in Personal Electronics, and further deterioration in Industrial.
“Our first quarter business outlook, at the mid-point, is for net revenues of $3.6 billion, decreasing year-over-year by 15.2% and decreasing sequentially by 15.9%; gross margin is expected to be about 42.3%,” he noted. “For 2024, we plan to invest about $2.5 billion in net CAPEX. We will drive the company based on a plan for FY24 revenues in the range of $15.9 billion to $16.9 billion. Within this plan, we expect a gross margin in the low to mid-40s.”
Fourth Quarter 2023 Summary Review
Net revenues totaled $4.28 billion, representing a year-over-year decrease of 3.2%. On a year-over-year basis, ADG revenues increased 21.5%, while AMS and MDG decreased 25.8% and 11.5% respectively. Year-over-year net sales to OEMs and Distribution decreased 0.4% and 9.2%, re-spectively.
Gross profit totaled $1.95 billion, representing a year-over-year decrease of 7.3%. Gross margin of 45.5%, 50 basis points below the mid-point of ST’s guidance, decreased 200 basis points year-over-year, due to higher input manufacturing costs, unused capacity charges, and negative currency effect net of hedging, partially offset by the combination of sales price and product mix.
Operating income decreased 20.5% to $1.02 billion, compared to $1.29 billion in the year-ago quarter. ST’s operating margin decreased 520 basis points on a year-over-year basis to 23.9% of net revenues, compared to 29.1% in the fourth quarter of 2022.
Cash Flow and Balance Sheet Highlights
Net cash from operating activities was $1.48 billion in the fourth quarter compared to $1.55 billion in the year-ago quarter. For the full-year 2023, net cash from operating activities increased 15.2% to $5.99 billion, representing 34.7% of total revenues. Free cash flow was $652 million and $1.77 billion in the fourth quarter and full year, respectively, compared to $603 million and $1.59 billion in the year-ago respective periods. ST’s net financial position (non-U.S. GAAP) was $3.16 billion as of Dec. 31, 2023, compared to $2.46 billion as of Sept. 30, 2023 and reflected total liquidity of $6.08 billion and total financial debt of $2.93 billion.
On Jan. 10, 2024, ST announced a new organization to deliver enhanced product development innovation and efficiency, time-to-market as well as customer focus by end market. ST will be re-organized into two product groups, split into four reportable segments and the existing sales and marketing organization will be complemented by a new application marketing organization focused by end markets across all regions.
ST reported fourth quarter net revenues of $4.28 billion, gross margin of 45.5%, operating margin of 23.9%, and net income of $1.08 billion or $1.14 diluted earnings per share.
“FY23 revenues increased 7.2% to $17.29 billion,” said Jean-Marc Chery, ST president and CEO. “Operating margin was 26.7% compared to 27.5% in FY22 and net income increased 6.3% to $4.21 billion. We invested $4.11 billion in net CAPEX while delivering free cash flow of $1.77 billion.
“In Q4, ST delivered revenues and gross margin slightly below the mid-point of the guidance, with higher revenues in Personal Electronics offset by a softer growth rate in Automotive,” Chery said. “In Q4, our customer order bookings decreased compared to Q3. We continued to see stable end-demand in Automotive, no significant increase in Personal Electronics, and further deterioration in Industrial.
“Our first quarter business outlook, at the mid-point, is for net revenues of $3.6 billion, decreasing year-over-year by 15.2% and decreasing sequentially by 15.9%; gross margin is expected to be about 42.3%,” he noted. “For 2024, we plan to invest about $2.5 billion in net CAPEX. We will drive the company based on a plan for FY24 revenues in the range of $15.9 billion to $16.9 billion. Within this plan, we expect a gross margin in the low to mid-40s.”
Fourth Quarter 2023 Summary Review
Net revenues totaled $4.28 billion, representing a year-over-year decrease of 3.2%. On a year-over-year basis, ADG revenues increased 21.5%, while AMS and MDG decreased 25.8% and 11.5% respectively. Year-over-year net sales to OEMs and Distribution decreased 0.4% and 9.2%, re-spectively.
Gross profit totaled $1.95 billion, representing a year-over-year decrease of 7.3%. Gross margin of 45.5%, 50 basis points below the mid-point of ST’s guidance, decreased 200 basis points year-over-year, due to higher input manufacturing costs, unused capacity charges, and negative currency effect net of hedging, partially offset by the combination of sales price and product mix.
Operating income decreased 20.5% to $1.02 billion, compared to $1.29 billion in the year-ago quarter. ST’s operating margin decreased 520 basis points on a year-over-year basis to 23.9% of net revenues, compared to 29.1% in the fourth quarter of 2022.
Cash Flow and Balance Sheet Highlights
Net cash from operating activities was $1.48 billion in the fourth quarter compared to $1.55 billion in the year-ago quarter. For the full-year 2023, net cash from operating activities increased 15.2% to $5.99 billion, representing 34.7% of total revenues. Free cash flow was $652 million and $1.77 billion in the fourth quarter and full year, respectively, compared to $603 million and $1.59 billion in the year-ago respective periods. ST’s net financial position (non-U.S. GAAP) was $3.16 billion as of Dec. 31, 2023, compared to $2.46 billion as of Sept. 30, 2023 and reflected total liquidity of $6.08 billion and total financial debt of $2.93 billion.
On Jan. 10, 2024, ST announced a new organization to deliver enhanced product development innovation and efficiency, time-to-market as well as customer focus by end market. ST will be re-organized into two product groups, split into four reportable segments and the existing sales and marketing organization will be complemented by a new application marketing organization focused by end markets across all regions.