Q1 free cash was $134 million after Net Capex of $967 million
For Q2, net revenues of $3.2 billion and gross margin of 40% are expected.
For the full year, revenues of $14-15 billion are expected, down from a previous expectation of $15.9 billion to $16.9 billion.
“During the quarter, Automotive semiconductor demand slowed down compared to our expectations, entering a deceleration phase, while the ongoing Industrial correction accelerated,” added Chery, “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,” said Chery, “we plan to maintain our Net Capex plan for FY24 at about $2.5 billion focusing on our strategic manufacturing initiatives.”
Quarterly Financial Summary (U.S. GAAP)
| (US$ 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 | $1.10 | -52.6% | -50.9%
|
| Net Revenues by Reportable Segment (US$ m) | Q1 2024 | Q4 2023 | Q1 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% |
Net revenues totalled $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.