STMircro shares could open in the green Wednesday, following the release of a strong third-quarter earnings report. The European chipmaker said revenues grew some 18% from a year earlier, while its fourth quarter and full year earnings outlook also remains upbeat.
STMicro shares ended the European Tuesday trading session 3.39% lower at €13.53. The stock has been moving broadly lower in recent weeks.
STMicro Q3 earnings
STMirco said Wednesday, that net revenues in the third quarter, rose 18.1% to €2.52 billion, from a year earlier. The chipmaker also said its operating income was 41.8% higher at €398 million, over the same period.
Those gains were supported by a strong performance in the auto and imaging business. Revenue growth in its automotive activities grew 16.3% to €901 million in the third quarter, from a year earlier. Meanwhile, revenues in its imaging business, surged 36.7% to €899 million.
“ST had another quarter of solid performance, with sequential revenue growth of 11.2%, above our 10% midpoint outlook, and operating margin expansion to 15.8%,” said STMicro CEO and president, Jean-Marc Chery.
“Revenue increased… driven by strong growth in Imaging, Power Discrete and Automotive products. Operating income and net income were up sharply year-over-year and sequentially,” Chery added.
After suffering amid a tough and volatile time for tech stocks and also following disappointing results Tuesday, from Atos and AMS AG, STMicro’s earnings report appears a brighter prospect than some of its rivals.
Looking ahead, the chipmaker said it is currently anticipating an 5.7% revenue increase from the third quarter. That would translate into around an 8%+ rise in fourth quarter revenues compared with the same period a year earlier. STMicro added that it expects Q4 gross margin growth of 39.8%, year-on-year.
“Based on our fourth quarter guidance, we anticipate 2018 revenues to grow about 16% year-over-year, in line with our expectations shared in May at our Capital Markets Day. This level of revenue growth will also drive strong improvements in operating margin and net earnings,” Chery said.