STMicroelectronics (STM) Q3 2024 earnings summary

Executive summary

• Q3 2024 net revenues were $3.25 billion, down 26.6% year-over-year, mainly due to industrial and automotive declines, with gross margin at 37.8% and net income at $351 million.

• Net income for Q3 was $351 million, down 68% year-over-year; EPS was $0.37 versus $1.16 last year.

• 9M 2024 net revenues totaled $9.95 billion, down 23.5% year-over-year, with declines across all segments, especially Microcontrollers.

• Sequential Q3 revenues rose 0.6%, in line with guidance; Q4 outlook projects $3.32 billion in revenues and 38% gross margin.

• Announced a company-wide program to reshape manufacturing, accelerate 300mm/200mm transitions, and resize cost base.

Financial highlights

• Q3 gross margin was 37.8%, down from 47.6% year-over-year; operating margin was 11.7% versus 28%.

• Q3 gross profit was $1.23 billion, down 41.8% year-over-year; operating income fell 69.3% to $381 million.

• Free cash flow in Q3 was $136 million, down from $707 million year-over-year; net cash from operating activities was $723 million.

• Inventory at quarter-end was $2.88 billion, with 130 days sales of inventory, up from 114 days a year ago.

• Q3 net CapEx was $565 million; net financial position at $3.18 billion; total liquidity $6.3 billion, total debt $3.12 billion.

Outlook and guidance

• Q4 2024 net revenues expected at $3.32 billion midpoint, down 22.4% year-over-year, up 2.2% sequentially; gross margin about 38%, impacted by 400 bps of unused capacity charges.

• Full year 2024 revenues expected at $13.27 billion, down 23.2% year-over-year; gross margin about 39.4%.

• Q1 2025 revenue expected to decline well above normal seasonality due to backlog and fewer calendar days.

• 2024 net CapEx plan confirmed at about $2.5 billion.