Chipmaker STMicroelectronics sees an even softer first quarter in 2025

By Nathan Vifflin and Leo Marchandon

 

(Reuters) - STMicroelectronics, one of Europe’s largest chipmakers, said on Thursday it expected sales to fall further in the first quarter of 2025, as the downturn seen in its key markets drags on into the new year.

 

The company, whose clients include Tesla and Apple, sees first-quarter revenue of $2.51 billion, down from the $3.47 billion it reported a year earlier. Analysts polled by LSEG had forecast first-quarter revenue of $2.72 billion.

 

That implies a 27.6% decline for the first quarter, compared to a 18.4% decrease in the same period last year.

 

Bernstein analyst Sara Russo said the lack of a full-year guidance would leave investors nervous due to uncertainty over when the cycle would hit the bottom, after the first-quarter target came below the already lowered expectations.

 

"The lack of full year guidance is likely due to continuing low visibility, especially in industrial end markets," she added.

 

STMicro had already warned in November that its revenue would decline more than usual in the seasonally weak first quarter.

 

Its U.S.-based peer Texas Instruments, considered an industry bellwether, last week also forecast first-quarter profit below market estimates, as it grapples with an inventory buildup in its key automotive and industrial markets.

 

STMicro reported a fourth-quarter net income of $341 million, beating analysts’ average estimate of $326 million, driven by higher revenues in personal electronics and despite lower revenues in industrial.

 

It also outlined its capital expenditure plans for 2025, with plans to invest between $2 billion and $2.3 billion.

 

That is down from $2.53 billion last year and $4 billion in 2023.

 

(Reporting by Nathan Vifflin and Leo Marchandon in Gdansk; editing by Milla Nissi)