Amsterdam — STMicroelectronics reported a second-quarter loss on Thursday, its first in more than a decade as it took a $190m hit for restructuring and impairment costs.
Shares in the French-Italian chipmaker, which manufactures power chips for Tesla’s drivetrains and eSim modules for Apple’s iPhones, fell by as much as 13% — on track for their worst day since January.
The company reported an operating loss of $133m for the three months to end-June, confounding analysts surveyed by LSEG who had, on average, forecast a profit of $56.2m.
STMicro said that without the $190m in impairment, restructuring charges and other costs, the company would have registered a quarterly profit of $57m.
STMicro’s heavy reliance on in-house manufacturing, representing about 80% of sales, has burdened it with underused factories and high staff costs when the market slows, unlike rivals Infineon and NXP that use more contract manufacturing, analysts say.
Chipmakers exposed to the struggling automotive, industrial, and consumer chip markets, such as STMicro, Texas Instruments and NXP, have faced a sales slump, hit by low demand, high inventories and geopolitical disruptions.
“Investors probably wanted to see more recovery,” analyst Utsav Sinha of AlphaValue said in an emailed comment on Thursday’s earnings report.
Upbeat outlook
STMicro CEO Jean-Marc Chery was more upbeat about the outlook for the rest of the year.
“If we have a booking dynamic in the third quarter on a similar path of what we have seen in the first two quarters we should expect to grow sequentially in the fourth quarter,” he said during a call with investors.
Analysts said that while the stronger sales trend suggested STMicro could achieve revenue growth this year, potential US trade tariffs could cloud the outlook.
In June, the company said it saw early signs of an up cycle, or a period of increased market demand, which would allow it to reach its second-quarter revenue goal of $2.71bn.
Revenue rose to $2.76bn in the second quarter from $2.52bn in the previous three months, ahead of that target. STMicro now expects revenue to reach $3.17bn in the third quarter, ahead of analysts’ forecasts of $3.10bn.
STMicro unveiled a cost-cutting plan last year to restructure its manufacturing facilities and save hundreds of millions of dollars by 2027.
The plans, which included axing 5,000 jobs in France and Italy over the next three years, started a spat between the French and Italian governments, which jointly own 27.5% of the firm. Reuters
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