STMicroelectronics Reports 2Q 2021 Financial Results

STMicroelectronics reported US GAAP financial results for the second quarter ended July 3, 2021.

Net revenues totaled $2.99 billion, a year-over-year increase of 43.4%. On a year-over-year basis, the company recorded higher net sales in all product groups except the RF Communications sub-group. Year-over-year net sales to OEMs and Distribution increased 38.4% and 53.1%, respectively.

Gross profit totaled $1.21 billion, a year-over-year increase of 66.1%. Gross margin of 40.5% increased 550 basis points year-over-year, mainly driven by lower unloading charges, manufacturing efficiencies, favorable pricing and improved product mix partially offset by negative currency effects, net of hedging.

Operating income increased 358.8% to $489 million, compared to $106 million in the year-ago quarter. The company’s operating margin increased 1,120 basis points on a year-over-year basis to 16.3% of net revenues, compared to 5.1% in the 2020 second quarter.

Free cash flow (non-US GAAP) was $125 million in the second quarter, up from $28 million in the year-ago quarter.

First half 2021 net revenues were $6.01 billion, with gross margin of 39.7%, operating margin of 15.5% and net income of $776 million.

“First half net revenues increased 39.1% year-over-year, driven by growth in all product groups, RF Communications sub-group,” said Jean-Marc Chery, STMicroelectronics president and CEO. “Operating margin was 15.5% and net income $776 million. ST’s third quarter outlook, at the mid-point, is for net revenues of $3.2 billion, increasing year-over-year and sequentially by 20% and 7%, respectively; gross margin is expected to be about 41.0%.”

“We will now drive the company based on a plan for FY21 revenues of $12.5 billion, plus or minus $100 million, a year-over-year increase of 22.3% at the mid-point,” he added. “This growth is expected to be driven by strong dynamics in all the end markets we address and our engaged customer programs. Our CAPEX plan will now be about $2.1 billion for 2021.”