ST Q2 Net Revenue Rises 43.4% to $2.99 Bn

STMicroelectronics (ST) has reported an increase of 43.4 per cent in its net revenues to $2.99 billion during the second quarter of 2021, against $2.09 billion in Q2 2020.

On a y-o-y basis, the company recorded higher net sales in all product groups except the RF Communications sub-group. Y-o-y net sales to OEMs and Distribution increased 38.4 per cent and 53.1 per cent, respectively.

Commenting on the financial performance, Jean-Marc Chery, President & CEO, of STMicroelectronics, said “Q2 net revenues and gross margin came in at the high-end of our business outlook range driven by continued strong demand globally.”

“On a year-over-year basis, Q2 net revenues increased 43.4%. Q2 gross margin of 40.5% and operating margin of 16.3% improved 550 and 1,120 basis points, respectively, and net income increased 357.2% to $412 million,” he added.

He also said that “first half net revenues increased 39.1% year-over-year, driven by growth in all product groups, except the RF Communications sub-group. Operating margin was 15.5% and net income $776 million.”

“ST’s third quarter outlook, at the mid-point, is for net revenues of $3.20 billion, increasing year-over-year and sequentially by 20.0% and 7.0%, respectively; gross margin is expected to be about 41.0%,” Jean-Marc Chery commented.

“We will now drive the Company based on a plan for FY21 revenues of $12.5 billion, plus or minus $100 million, a year-over-year increase of 22.3% at the mid-point. This growth is expected to be driven by strong dynamics in all the end markets we address and our engaged customer programs. Our CAPEX plan will now be about $2.1 billion for 2021,” he said.

The company’s gross profit totaled $1.21 billion, a y-o-y increase of 66.1%. Gross margin of 40.5% increased 550 basis points year-over-year, mainly driven by lower unloading charges, manufacturing efficiencies, favorable pricing and improved product mix partially offset by negative currency effects, net of hedging.

ST’s operating income increased 358.8% to $489 million, compared to $106 million in the year-ago quarter. It’s operating margin increased 1,120 basis points on a y-o-y basis to 16.3% of net revenues, compared to 5.1% in the 2020 second quarter.