The fourth quarter 2018 revenue of $2.648 billion and net income of $418 million was a pleasant surprise although the company gave warning of a sharp drop in sales revenue expected in the first quarter of 2019. This was in line with a previous report from foundry giant TSMC (see TSMC forecasts feeble first quarter) and was largely expected. ST said revenue growth would accelerate in 2H19.
The 4Q18 sales were up 5.0 percent sequentially and 7.4 percent year-on-year.
For the full year 2018 ST had net revenues of $9.644 billion, up 15.8 percent on 2017, and net income of $1.287 billion, up 60.4 percent, on 2017. The full year result was led by imaging, automotive and power discrete product sales, CEO Jean-Marc Chery said, in a statement.
Chery said that 1Q19 revenues would be about $2.1 billion, a sequential decline of 20.7 percent and down 5.7 percent compared with 1Q18. This is due to the combination of normal first quarter seasonality overlaid with "increased unfavourable dynamics" in some end markets, he said.
In the quarter ST's Automotive and Discrete Group (ADG) and Analog, MEMS and Sensors (AMS) group performed well, offsetting falling sales in the Microcontrollers and Digital ICs Group (MDG). With $967 million in sales ADG was up 17.8 percent year-on-year. AMS achieved sales of $988 million up 9.5 percent on the same basis. MDG had sales of $689 million down 4.1 percent sequentially and down 6.9 percent year-on-year.
"For 2019 our key objectives are to continue outperforming our served market, to balance our end market and application focus and to execute on our strategic technology, R&D and manufacturing programs," said Chery.
ST's capital expenditure budget for 2019 has been set at $1.2 to $1.3 billion.
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