PR No: C3254C

STMicroelectronics Reports 2024 First Quarter Financial Results

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-- Q1 net revenues $3.47 billion; gross margin 41.7%; operating margin
15.9%; net income $513 million

-- Q1 free cash flow1 $(134) million after Net Capex1 of $967 million

-- Business outlook at mid-point: Q2 net revenues of $3.2 billion and gross
margin of 40%
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Geneva, April 25, 2024 -- STMicroelectronics N.V. ("ST") (NYSE: STM), a global semiconductor leader serving customers across the spectrum of electronics applications, reported U.S. GAAP financial results for the first quarter ended March 30, 2024. This press release also contains non-U.S. GAAP measures (see Appendix for additional information).

ST reported first quarter net revenues of $3.47 billion, gross margin of 41.7%, operating margin of 15.9%, and net income of $513 million or $0.54 diluted earnings per share.

Jean-Marc Chery, ST President & CEO, commented:

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-- "Q1 net revenues and gross margin both came in below the midpoint of our
business outlook range, driven by lower revenues in Automotive and
Industrial, partially offset by higher revenues in Personal Electronics."

-- "On a year-over-year basis, Q1 net revenues decreased 18.4%, operating
margin decreased to 15.9% from 28.3% and net income decreased 50.9% to
$513 million."

-- "During the quarter, Automotive semiconductor demand slowed down compared
to our expectations, entering a deceleration phase, while the ongoing
Industrial correction accelerated."

-- "Our second quarter business outlook, at the mid-point, is for net
revenues of $3.2 billion, decreasing year-over-year by 26.0% and
decreasing sequentially by 7.6%; gross margin is expected to be about
40%."

-- "We will now drive the Company based on a revised plan for FY24 revenues
in the range of $14 billion to $15 billion. Within this plan, we expect a
gross margin in the low 40's."

-- "We plan to maintain our Net Capex1 plan for FY24 at about $2.5 billion
focusing on our strategic manufacturing initiatives."
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Quarterly Financial Summary (U.S. GAAP)

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(US$ m, except per

share data)                  Q1 2024  Q4 2023  Q1 2023    Q/Q        Y/Y 
-----------------------  -------------  -------  -------  --------  ---------- 
Net Revenues                  $3,465   $4,282   $4,247    -19.1%      -18.4% 
-----------------------  -------------  -------  -------  --------  ---------- 
Gross Profit                  $1,444   $1,949   $2,110    -26.0%      -31.6% 
-----------------------  -------------  -------  -------  --------  ---------- 
Gross Margin                   41.7%    45.5%    49.7%  -380 bps    -800 bps 
-----------------------  -------------  -------  -------  --------  ---------- 
Operating Income                $551   $1,023   $1,201    -46.1%      -54.1% 
-----------------------  -------------  -------  -------  --------  ---------- 
Operating Margin               15.9%    23.9%    28.3%  -800 bps  -1,240 bps 
-----------------------  -------------  -------  -------  --------  ---------- 
Net Income                      $513   $1,076   $1,044    -52.4%      -50.9% 
-----------------------  -------------  -------  -------  --------  ---------- 

Diluted Earnings Per

Share                         $0.54    $1.14    $1.10    -52.6%      -50.9% 
-----------------------  -------------  -------  -------  --------  ---------- 

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First Quarter 2024 Summary Review

Reminder: On January 10, 2024, ST announced a new organization which implied a change in segment reporting starting Q1 2024. Comparative periods have been adjusted accordingly. See Appendix for more detail.

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Net Revenues by Reportable Segment (US$      Q1     Q4     Q1 
m)                                         2024   2023   2023    Q/Q     Y/Y 

-------------------------------------------- ----- ----- ----- ------ ------ Analog products, MEMS and Sensors (AM&S)
segment 1,217 1,418 1,400 -14.2% -13.1%
-------------------------------------------- ----- ----- ----- ------ ------ Power and discrete products (P&D) segment 820 965 909 -15.1% -9.8%
-------------------------------------------- ----- ----- ----- ------ ------ Subtotal: Analog, Power & Discrete,
MEMS and Sensors (APMS) Product Group 2,037 2,383 2,309 -14.5% -11.8%
-------------------------------------------- ----- ----- ----- ------ ------ Microcontrollers (MCU) segment 950 1,272 1,448 -25.3% -34.4%
-------------------------------------------- ----- ----- ----- ------ ------ Digital ICs and RF Products (D&RF) segment 475 623 486 -23.8% -2.1%
-------------------------------------------- ----- ----- ----- ------ ------ Subtotal: Microcontrollers, Digital
ICs and RF products (MDRF) Product Group 1,425 1,895 1,934 -24.8% -26.3%
-------------------------------------------- ----- ----- ----- ------ ------ Others 3 4 4 - -
-------------------------------------------- ----- ----- ----- ------ ------ Total Net Revenues 3,465 4,282 4,247 -19.1% -18.4%
-------------------------------------------- ----- ----- ----- ------ ------
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Net revenues totaled $3.47 billion, representing a year-over-year decrease of 18.4%. Year-over-year net sales to OEMs and Distribution decreased 11.5% and 30.8%, respectively. On a sequential basis, net revenues decreased 19.1%, 320 basis points lower than the mid-point of ST's guidance.

Gross profit totaled $1.44 billion, representing a year-over-year decrease of 31.6%. Gross margin of 41.7%, 60 basis points below the mid-point of ST's guidance, decreased 800 basis points year-over-year, mainly due to the combination of sales price and product mix, unused capacity charges and reduced manufacturing efficiencies.

Operating income decreased 54.1% to $551 million, compared to $1.20 billion in the year-ago quarter. ST's operating margin decreased 1,240 basis points on a year-over-year basis to 15.9% of net revenues, compared to 28.3% in the first quarter of 2023.

By reportable segment, compared with the year-ago quarter:

In Analog, Power & Discrete, MEMS and Sensors (APMS) Product Group:

Analog products, MEMS and Sensors (AM&S) segment:

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-- Revenue decreased 13.1% mainly due to a decrease in MEMS and Imaging.

-- Operating profit decreased by 44.8% to $185 million. Operating margin was
15.2% compared to 23.9%.
===
Power and Discrete products (P&D) segment:

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-- Revenue decreased 9.8% mainly due to a decrease in Discrete.

-- Operating profit decreased by 41.6% to $138 million. Operating margin was
16.8% compared to 26.0%.
===
In Microcontrollers, Digital ICs and RF products (MDRF) Product Group:

Microcontrollers (MCU) segment:

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-- Revenue decreased 34.4% mainly due to a decrease in GP MCU.

-- Operating profit decreased by 66.7% to $185 million. Operating margin was
19.5% compared to 38.3%.
===
Digital ICs and RF products (D&RF) segment:

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-- Revenue decreased 2.1% due to a decrease in ADAS more than offsetting an
increase in RF Communications.

-- Operating profit decreased by 8.2% to $150 million. Operating margin was
31.8% compared to 33.9%.
===
Net income and diluted Earnings Per Share decreased to $513 million and $0.54 respectively compared to $1.04 billion and $1.10 respectively in the year-ago quarter.

Cash Flow and Balance Sheet Highlights

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Trailing 12 Months

---------------------  -------  -------  -------  ---------------------------- 
(US$ m)              Q1 2024  Q4 2023  Q1 2023  Q1 2024  Q1 2023  TTM Change 
---------------------  -------  -------  -------  -------  -------  ---------- 

Net cash from
operating

activities              859    1,480    1,320    5,531    5,577       -0.8% 
---------------------  -------  -------  -------  -------  -------  ---------- 

Free cash flow
(non-U.S.

GAAP)(1)              (134)      652      206    1,434    1,715      -16.4% 
---------------------  -------  -------  -------  -------  -------  ---------- 

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Net cash from operating activities was $859 million in the first quarter compared to $1.32 billion in the year-ago quarter.

Net Capex (non-U.S. GAAP)(1) was $967 million in the first quarter compared to $1.09 billion in the year-ago quarter.

Free cash flow (non-U.S. GAAP)(1) was negative at $134 million in the first quarter, compared to positive $206 million in the year-ago quarter.

Inventory at the end of the first quarter was $2.69 billion, compared to $2.70 billion in the previous quarter and $2.87 billion in the year-ago quarter. Days sales of inventory at quarter-end was 122 days compared to 104 days in the previous quarter and 122 days in the year-ago quarter.

In the first quarter, ST paid cash dividends to its stockholders totaling $48 million and executed a $87 million share buy-back as part of its current share repurchase program.

ST's net financial position (non-U.S. GAAP)(1) was $3.13 billion as of March 30, 2024, compared to $3.16 billion as of December 31, 2023 and reflected total liquidity of $6.24 billion and total financial debt of $3.11 billion. Adjusted net financial position (non-U.S. GAAP)(1) , taking into consideration the effect on total liquidity of advances from capital grants for which capital expenditures have not been incurred yet, stood at $2.78 billion as of March 30, 2024.

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