STMicroelectronics Lowers Revenue Forecast for 2023

(Reuters) – European chipmaker STMicroelectronics announced on Thursday that its full-year revenue will be at the low end of its previous guidance range. This marks the third time this year that the company has cut its outlook amid weak demand from industrial clients.

Automotive semiconductor companies like STMicroelectronics, Texas Instruments (NASDAQ:TXN), and Melexis are experiencing challenges in industrial markets, as customers are reducing orders due to high inventories and declining car demand.

STMicroelectronics, with clients including Tesla (NASDAQ:TSLA) and Apple (NASDAQ:AAPL), now expects to record annual revenue of $13.27 billion, slightly below its earlier forecast of $13.2 billion to $13.7 billion, which was last updated in July.

Analysts surveyed by LSEG estimated that the company would achieve revenue of $13.26 billion for the year.

"Based on our current customer order backlog and demand visibility, we anticipate a revenue decline between Q4 2024 and Q1 2025 that is significantly above normal seasonal patterns," Europe's largest chipmaker by revenue stated.

Nonetheless, STMicroelectronics reported third-quarter earnings before interest and tax (EBIT) that exceeded market expectations, despite falling 69.3% from last year to $381 million, as analysts had predicted an average of $321 million.

Quarterly revenue also declined, dropping 26.6% to $3.25 billion, which aligns closely with analysts' estimate of $3.24 billion.