STMicroelectronics Clocks 20% Revenue Growth In Q3, Expands Margins, Issues Positive Outlook

STMicroelectronics NV STM reported third-quarter FY21 revenue growth of 19.9% year-on-year to $3.197 billion, missing the consensus of $3.21 billion. Sales to OEMs increased 9.9%, Distribution sales improved 48.6% Y/Y.
Automotive and Discrete Group (ADG) revenue rose 18.1% Y/Y to $1.005 billion. Analog, MEMS, and Sensors Group (AMS) revenue increased 27.1% Y/Y to $1.268 billion. Microcontrollers and Digital ICs Group (MDG) revenue grew 12.9% Y/Y to $920 million.
Margins: The gross margin expanded 560 bps to 41.6%. Improved product mix, manufacturing efficiencies, favorable pricing, and lower unloading charges drove the margin partially offset by adverse currency effects, net of hedging.
The operating margin expanded by 660 bps to 18.9%.
EPS of $0.51 missed the consensus of $0.53.
STMicroelectronics generated $895 million in operating cash flow and held $3.5 billion in cash and equivalents.
Outlook: STMicroelectronics sees Q4 mid-point revenue of $3.4 billion and expects a gross margin of 43%.
For FY21, STMicroelectronics sees revenues at the mid-point of $12.6 billion.
Price Action: STM shares traded higher by 4.62% at $47.11 in the premarket session on the last check Thursday.

Momentum18.84

Growth17.39

Quality15.68

Value77.47

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