ST Microelectronics' Q1 2018 revenue up 22% to $2.23 billion

The Switzerland-headquartered semiconductor major ST Microelectronics (ST) has reported its Q1 CY2018 (January-March) net revenue at $2.23 billion (Rs 14,854 crore), a growth of 22.2 percent YoY, with gross margin at 39.9 percent. The net income for same period came at $239 million (Rs 1,592 crore).

In Q1 CY2018, the increase in net revenues was on the back of all product groups delivering double-digit revenue growth. Specifically, the microcontrollers and digital ICs group (MDG) revenues grew by 26.6 percent, which was largely driven by a strong expansion of microcontroller sales; analog, MEMS and sensors group (AMS) revenues increased 26.5 percent on sharply higher imaging sales, as well as growth in analog and MEMS; while automotive and discrete group (ADG) revenues increased by 15.4 percent.

The regional growth on YoY basis for the company was primarily driven by Asia Pacific (24.5%), EMEA (22.4%) and the Americas (12.7%).

The gross profit for Q1 CY2018 was $888 million (Rs 5,914 crore) and gross margin was 39.9 percent or 40 basis points above the midpoint of the ST’s guidance. On a sequential basis, the decline in gross margin by 80 basis points was mainly due to normal price pressure and negative currency effects, net of hedging which was partially offset by improved product mix and increased manufacturing efficiency.

R&D and Business
In Q1 CY2018, the semiconductor major's expenditure on R&D and SG&A (selling, general and administrative) expenses increased to $614 million (Rs 4,089 crore) compared to $590 million (Rs 3,930 crore) in the prior quarter, the increase of $48 million (Rs 319 crore) was mainly due to negative currency effects, net of hedging, and inflationary dynamics.

“We started 2018 with another quarter of double-digit, year-over-year sales growth across all product groups and regions. On a sequential basis, first quarter results were better than the mid-point of our sales and gross margin guidance. We delivered a better than seasonal performance in automotive and industrial, thanks to our application-focused approach on smart driving and IoT, despite the anticipated unfavourable seasonal dynamics for smartphone applications,” said Carlo Bozotti, president and CEO, ST Microelectronics.

“On a year-over-year basis, net revenues grew 22.2 percent, gross margin expanded by 220 basis points to 39.9 percent and operating margin increased by 480 basis points to 12.1 percent. Free cash flow, during a quarter of high capital spending to support our growth plans, increased by 53 percent to $95 million (Rs 632 crore) from the year-ago quarter and we exited the quarter with a solid net financial position of $522 million (Rs 3,477 crore).”