Ameya360:STMicroelectronics Posts 26.4% Revenue Growth for FY2022, Earmarks $4B for 2023 CAPEX

　　STMicroelectronics has reported fourth quarter net revenues of $4.42 billion, gross margin of 47.5%, operating margin of 29.1%, and net income of $1.25 billion or $1.32 diluted earnings per share.

　　“In Q4, ST delivered revenues and gross margin above the mid-point of the guidance,” said Jean-Marc Chery, STMicroelectronics President & CEO. “FY22 revenues increased by 26.4% to $16.13 billion, driven by strong demand in automotive and industrial, and our engaged customer programs. Operating margin increased to 27.5% from 19% in FY21 and net income almost doubled to $3.96 billion. We invested $3.52 billion in CAPEX while delivering free cash flow of $1.59 billion. Our first quarter business outlook, at the mid-point, is for net revenues of $4.20 billion, increasing year-over-year by 18.5% and decreasing sequentially by 5.1%; gross margin is expected to be about 48%.”

　　For 2023, ST plans to invest about $4 billion in CAPEX, mainly to increase its 300mm wafer fabs and silicon carbide (SiC) manufacturing capacity including our substrate initiative. “Based on our strong customer demand and increased manufacturing capacity, we will drive the Company based on a plan for FY23 revenues in the range of $16.8 billion to $17.8 billion,” added Chery.

　　Net revenues totaled $4.42 billion, representing a year-over-year increase of 24.4%. On a year-over-year basis, ST recorded higher net sales in all product groups and sub-groups except the Analog and MEMS sub-groups. Year-over-year net sales to OEMs and Distribution increased by 26.8% and 19.5%, respectively. On a sequential basis, net revenues increased by 2.4%, 60 basis points above the mid-point of the company’s guidance. ADG and MDG reported increases in net revenues on a sequential basis, while AMS decreased.

　　Meanwhile, gross profit totaled $2.1 billion, representing a year-over-year increase of 30.7%. Gross margin of 47.5%, 20 basis points above the mid-point of the Company’s guidance, increased 230 basis points year-over-year, principally due to favorable pricing, improved product mix, positive currency effects, net of hedging, partially offset by the inflation of manufacturing input costs.

　　ST’s operating income increased by 45.4% to $1.29 billion, compared to $885 million in the year-ago quarter. Operating margin increased by 420 basis points on a year-over-year basis to 29.1% of net revenues, compared to 24.9% in the 2021 fourth quarter.

　　By product group, compared with the year-ago quarter, revenue increased in Automotive and in Power Discrete under the Automotive and Discrete Group (ADG). Operating profit increased by 117.9% to $470.2 million, while operating margin was 27.7% compared to 17.6%.

　　For the Analog, MEMS and Sensors Group (AMS), revenue increased in Imaging and decreased in Analog and MEMS. Operating profit increased by 2.4% to $345.6 million, while operating margin was 25.8% compared to 27%.

　　Finally, the Microcontrollers and Digital ICs Group’s (MDG) operating profit increased by 56.6% to $495.3 million, while operating margin was 35.8% compared to 29.5%. Revenue was driven by increases in Microcontrollers and in RF Communications sectors.

　　Net income increased to $1.25 billion, including a one-time non-cash income tax benefit of $141 million, compared to $750 million in the same period last year.

　　Outlook

　　ST expects net revenues to be around $4.2 billion for the first quarter of 2023 (which will close on April 1, 2023), down by 5.1% sequentially, and gross margin of 48%, plus or minus 200 basis points. This outlook is based on an assumed effective currency exchange rate of approximately $1.06 = €1.00 for the 2023 first quarter and includes the impact of existing hedging contracts.