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HomeMarketSTMicroelectronics Tops Estimates. The Tesla Supplier’s Stock Is Rising.

STMicroelectronics Tops Estimates. The Tesla Supplier’s Stock Is Rising.

STMicroelectronics plans about $4 billion in capital spending this year to increase its manufacturing capacity.

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Photograph by Andrey Rudakov/Bloomberg

European chip maker
STMicroelectronics
rose on Thursday after its profit and revenue beat consensus expectations. 

The supplier to
Tesla
(ticker: TSLA) and
Apple
(AAPL) is enjoying strong semiconductor demand from automotive and industrial customers after shortages of chips hit the auto sector hard last year.

That’s allowing
STMicroelectronics
(ticker: STM) to defy a wider downturn in demand for chips signaled by industry bellwether
Texas Instruments
(TXN) on Tuesday. 

“2022 was a year marked again by strong demand in Automotive and
Industrial, still impacted by supply-chain challenges due to continuing
shortages and capacity constraints,” CEO Jean-Marc Chery said in prepared remarks. “In the second half, we started to see a market softening in Personal Electronics and Computer Peripherals.”

STMicroelectronics
reported a fourth-quarter net profit of $1.25 billion, on revenue of $4.42 billion. Analysts polled by FactSet had forecast a profit of $1.07 billion on revenue of $4.41 billion. 

Shares in STMicroelectronics, which Barron’s wrote about favorably last April, were up 5.6% in premarket trading in New York. 

The company expects 2023 net revenue between $16.8 billion and $17.8 billion, representing a growth range of 4% to 10%. Analysts at UBS said the range was ahead of consensus expectations of $16.5 billion. 

STMicroelectronics plans about $4 billion in capital spending this year, up from $3.5 billion in 2022, mainly to increase its manufacturing capacity. 

Write to Adam Clark at adam.clark@barrons.com

Credit: marketwatch.com

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