(23 January 2020)DAILY MARKET BRIEF 1: STMicroelectronics Net Profit Falls

STMicroelectronics NV (STM.FR) said Thursday that net profit for the fourth quarter fell year-on-year, while revenue rose amid higher sales. The European semiconductor chip maker said net profit fell 6.2% year-on-year to $392 million, with revenue increasing 4% to $2.75 billion. Gross margin fell to 39.3% from 40% a year earlier, the company said, adding that it plans to invest roughly $1.5 billion in capex for 2020. “Our 2019 financial performance, with net revenues of $9.56 billion and an operating margin of 12.6%, is aligned with the full-year expectations we provided in April 2019,” said Jean-Marc Chery, STMicroelectronics president and chief executive. When announcing its third quarter results last October, STMicroelectronics announced its expectations for the fourth quarter based on "sequential sales growth of around 5% at mid-point, translating into an increase of around 1.2% year-on-year", and a gross margin of around 38.2%, including around 120 basis points of charges related to idle production capacity.

By Ipek Ozkardeskaya