On January 30, STMicroelectronics stated that it was premature to provide guidance for the full year 2025 following a warning that sales would decline further in the first quarter due to ongoing market challenges. The shares of STMicro, a major chipmaker in Europe, dropped 6.8% to 22.18 euros by 1226 GMT, hitting their lowest point since June 2020.
During a call with analysts, CEO Jean-Marc Chery mentioned the difficulty in offering guidance for 2025 due to poor visibility and continued inventory adjustments among customers. Describing Q1 as potentially the low point of 2025, Chery acknowledged analysts' concerns about the cycle's bottom.
STMicro, with clients such as Tesla and Apple, estimated first-quarter revenue at $2.51 billion, which signifies nearly a 28% decrease year-over-year. Despite prior alerts about the revenue decline in the seasonally slow Q1, the guidance fell short of analysts' expectations of $2.72 billion.
Similarly, U.S.-based peer Texas Instruments, an industry benchmark, projected first-quarter profits below market forecasts, attributing it to inventory challenges in crucial automotive and industrial sectors.
STMicro revealed plans to curtail production days at its facilities and temporarily shut down some fabs during the quarter to manage inventory. CFO Lorenzo Grandi informed analysts of expectations for continued substantial unloading in Q2.
The company also outlined its 2025 capital expenditure plans, aiming to invest between $2 billion and $2.3 billion, a decrease from previous years. In the fourth quarter, the Franco-Italian group reported a net income of $341 million, surpassing analysts' predictions and driven by higher revenues in personal electronics despite lower industrial revenues.
(Note: Exchange rate: $1 = 0.9608 euros)