STMicroelectronics delays long-term targets to 2030

(Reuters) - STMicroelectronics (ST) pushed back its long-term financial forecasts on Wednesday, following three guidance cuts this year, amid a slump in markets for the industrial and automotive chips it makes.

 

ST, one of Europe’s largest semiconductor firms, said it aimed to hit annual revenue of $20 billion and an operating margin above 30% by 2030, instead of the previously forecast 2027. 

 

Some analysts welcomed the new guidance as positive for a company that has been hit hard by slumping industrial markets, with its stock declining 49% so far this year. 

 

"The reiteration of ST’s financial targets today confirms our view that the current weakness the company is going through is cyclical, not structural," brokerage Stifel said in a note.

 

"We believe that the targets presented today should help to improve sentiment."

 

The company also gave new intermediate guidance for 2027-2028, targeting revenue of $18 billion and an operating margin of 22-24%.

 

"ST expects to exit 2027 with high triple-digit million-dollar savings compared to the current cost base," the company added in the statement ahead of an investor day.

 

ST had flagged the launch of a company-wide programme to reshape its manufacturing footprint with its third-quarter earnings, but did not elaborate where those savings would come from.

 

Investors and analysts will be looking for details on the plan during Wednesday’s event.

 

(Reporting by Nathan Vifflin and Toby Sterling. Editing by Milla Nissi and Mark Potter)