STMicroelectronics shares fell 15.10% to €49.47 on July 23 after the chipmaker reported second-quarter earnings before interest, taxes and depreciation of $679 million, missing analyst expectations of $797.7 million. The Franco-Italian semiconductor manufacturer also forecast third-quarter revenue of approximately $3.70 billion with a range of plus or minus 3.5%, slightly below the $3.72 billion analysts surveyed by LSEG expected. STMicroelectronics attributed the weaker profitability to impairment charges, restructuring expenses, product phase-out costs and accounting effects connected to its acquisition of an NXP sensor business, which overshadowed stronger-than-expected quarterly revenue.
STMicroelectronics Reports Q2 Profit Miss and Stock Decline
The stock was trading at €49.47, down 15.10%, shortly after midday on July 23. The shares closed the previous session at €58.27. Despite the steep daily decline, STMicroelectronics stock is more than 110% higher since the beginning of the year.
Investor disappointment centered on the company's second-quarter core profit. Earnings before interest, taxes and depreciation reached $679 million, which was below the $797.7 million expected by the market. STMicroelectronics attributed the weaker result to impairment charges, restructuring expenses, product phase-out costs and accounting effects connected to its acquisition of an NXP sensor business.
Jefferies analysts suggested that the slightly weaker guidance may be linked to a slower ramp-up of Apple's anticipated iPhone 18. However, they pointed out that STMicroelectronics' gross margin guidance and fourth-quarter outlook could point to stronger performance heading into 2027.
STMicroelectronics Raises Data Center Revenue Forecast
STMicroelectronics now expects data center revenue to exceed $1 billion in 2026 and rise to well above $2 billion in 2027. That forecast assumes current demand conditions and customer programs develop as expected.
Chief Executive Jean-Marc Chery said demand increased even more during the quarter, supported by strong bookings across all of the company's end markets. STMicroelectronics also noticed improving visibility and signs of supply constraints in several product categories.
STMicroelectronics Forecasts Q4 Revenue Above $4 Billion
Management expects revenue growth to accelerate during the fourth quarter, mainly because of customer programs related to artificial intelligence data centers and low-Earth-orbit satellite communications. STMicroelectronics forecasts fourth-quarter revenue of more than $4 billion. This means that the company expects momentum to improve after its relatively cautious third-quarter projection.
FAQ
Why did STMicroelectronics stocks fall on July 23?
STMicroelectronics shares fell 15.10% to €49.47 on July 23 after the company reported second-quarter earnings before interest, taxes and depreciation of $679 million, missing analyst expectations of $797.7 million, and issued third-quarter revenue guidance of approximately $3.70 billion, slightly below the $3.72 billion analysts expected.
What is STMicroelectronics' data center revenue forecast?
STMicroelectronics expects data center revenue to exceed $1 billion in 2026 and rise to well above $2 billion in 2027, assuming current demand conditions and customer programs develop as expected.
What is STMicroelectronics' fourth-quarter revenue forecast?
STMicroelectronics forecasts fourth-quarter revenue of more than $4 billion, driven by customer programs related to artificial intelligence data centers and low-Earth-orbit satellite communications.
