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Stmicroelectronics N.V. ADR(STM-N)

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Why STMicroelectronics Stock Was a Winner This Week

Motley Fool - Fri Jan 27, 4:51PM CST

What happened

This was a good week to be invested in Netherlands-based semiconductor company STMicroelectronics(NYSE: STM). Its shares blasted more than 14% higher in price across the five trading days, according to data compiled by S&P Global Market Intelligence, thanks to a solid earnings beat in its latest quarter.

So what

On Thursday, STMicroelectronics reported its fourth quarter and full-year figures for 2022. For the former period, the company's revenue was $4.42 billion, a robust 24% higher on a year-over-year basis. More impressively, headline net income zoomed to a 66% rise, landing at just over $1.2 billion ($1.32 per share).

Analysts were expecting the company to do well but not that well. Collectively, they were on point in estimating a $4.42 billion top-line figure, but they were only modeling a $1.13 per-share net income.

In its earnings release, STMicroelectronics attributed its revenue improvements to solid demand from the industrial and automotive segments. All three of its product groups saw gains, led by automotive and discrete's 38% growth, and trailed by microcontrollers and digital integrated circuits (29%), and analog, MEMS, and sensors (7%).

Now what

STMicroelectronics also proffered guidance for its current first quarter of 2023. The mid-point of the company's forecast revenue range is $4.2 billion, which would represent a 5% drop from the Q4 tally. Gross margin is expeted to land at roughly 48%; the Q4 figure was slightly below that, at 47.5%.

No estimates were provided for the entirety of 2023, but STMicroelectronics did say that it aims to spend around $4 billion for capital expenditures.

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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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