As a result ST may fail to achieve year-on-year revenue growth in 2019. ST reported second quarter net revenues of $2.17 billion and net income of $160 million. This compares to a net income of $2.27 billion and net income of $261 million in 2Q18.
ST trimmed its full-year 2019 revenue estimate the range $9.35 billion to $9.65 billion from the $9.45 billion to $9.85 billion given a quarter before. ST's revenue in 2018 was $9.66 billion.
ST CEO Jean-Marc Chery said of the full-year outlook: "It is still assuming improving market conditions in the second half in automotive, industrial and mass market; however, at a different pace compared with our prior expectations." He also said: "For automotive, we continued to see very strong demand in smart mobility applications, driven by car electrification and digitalization. What has changed since Q1 and our capital markets day is a deterioration of market conditions in automotive with lower car registrations, particularly in China, affecting our legacy automotive products."
The most successful business division in 2Q19 was analog, MEMS and sensors, which achieved sales of $694 million, up 13.2 percent on the same quarter a year before. The largest group, automotive and discretes had sales of $885 million, up 1.7 percent year-on-year.
The third group – microcontrollers and digital ICs – saw revenues fall both sequentially and annually. Sales of $591 million in 2Q19 were down 24.4 percent on $782 million achieved in 2Q18.
Overall ST is expecting seasonal sequential revenue growth in 3Q19 of 15.2 percent at the mid-point of guidance driven by engaged customer programs and new products, in a softer than expected legacy automotive and industrial market.
ST said it was not changing its capital expenditure budget. ST had already pulled capex budget in to between $1.1 billion and $1.2 billion in April 2019.
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