STMicroelectronics Q4 Results Top Estimates; CFO Carlo Ferro To Step Down

(RTTNews) - STMicroelectronics NV (STM), a semiconductor company, reported a fourth-quarter profit that more than doubled from last year. Quarterly net revenues increased 32.6%. Both adjusted earnings per share and quarterly revenues topped analysts' expectations. On a year-over-year basis, operating income before impairment and restructuring charges increased by $275 million reflecting higher revenues, manufacturing efficiencies and improved product mix.

The company expects first quarter 2018 revenues to decrease about 10% on a sequential basis. Carlo Ferro, Chief Financial Officer and President Finance, Legal, Infrastructure and Services, has informed the Company about his intention to step down from his position at the same time as ST President and CEO Carlo Bozotti's retirement.

Carlo Bozotti, STMicroelectronics President & CEO , said, "We exited 2017 with very strong revenue growth, and significant improvement in our operating profitability and net income. In 2018, our objective is to leverage our achievements to continue to drive sustainable and profitable growth thanks to our product leadership."

STMicroelectronics expects first quarter 2018 revenues to decrease about 10% on a sequential basis, plus or minus 3.5 percentage points. Gross margin in the first quarter is expected to be about 39.5% plus or minus 2.0 percentage points.

The company said it expects to invest this year approximately $1.0 billion to $1.1 billion in order to support anticipated product portfolio mix and to fuel strong revenue growth in the second half of 2018 compared to the first half.

Separately, STMicroelectronics announced that Carlo Ferro, Chief Financial Officer and President Finance, Legal, Infrastructure and Services, has informed the Company about his intention to step down from his position at the same time as ST President and CEO Carlo Bozotti's retirement, which will be effective at the conclusion of the Annual General Shareholders' meeting, to pursue other personal opportunities. Ferro will remain President of ST's Italian affiliate until the end of 2018.

As previously reported, the mandate of Carlo Bozotti as Sole Member of the Managing Board, as well as President and CEO of STMicroelectronics, will expire at the end of the Annual General Meeting of Shareholders of 2018. The Supervisory Board of STMicroelectronics warmly thanks Carlo Bozotti who, through his 41-year career, brought an outstanding contribution to the Company and led the recent turnaround.

The Company noted that its Supervisory Board supports the continuity of ST's strategy, plans and management culture and, for this reason, will propose the appointment of Jean-Marc Chery as Sole Member of the Managing Board at the 2018 Annual General Meeting of Shareholders. Chery will also hold the position of President & CEO of STMicroelectronics.

Upon the proposal of Jean-Marc Chery, the Supervisory Board has approved the establishment of a newly formed Executive Committee, entrusted with the management of the Company and led by ST's President & CEO as its Chairman.

The Executive Committee and the new ST organization will become effective upon the appointment of Jean-Marc Chery as Sole Member of the Managing Board and President & CEO of ST, immediately following the Company's 2018 Annual General Meeting of Shareholders.

STMicroelectronics's Net income attributable to the parent company for the fourth-quarter significantly increased to $308 million, or $0.34 per share, from $112 million or $0.13 per share, in the year-ago quarter.

In the fourth quarter of 2017, the Company recorded a one-time, non-cash charge of $46 million as a result of the recently enacted Tax Cuts and Jobs Act (TCJA) in the United States. The charge results from the revaluation of the Company's deferred tax assets as of December 31, 2017.

On a non-GAAP basis, Net income attributable to the parent company for the fourth-quarter were $327 million, or $0.36 per share, compared to $137 million, or $0.15 per share, in the year-ago quarter. Analysts polled by Thomson Reuters expected the company to report earnings of $0.35 per share for the quarter. Analysts' estimates typically exclude special items.

Quarterly net revenues increased 32.6% to $2.47 billion from last year's $1.86 billion, reflecting double-digit growth across all product groups with strong traction of new products. Wall Street expected revenues of $2.36 billion for the quarter. Analog, MEMS and Sensors Group (AMS) fourth quarter revenues grew 70.1% year-over-year due to triple-digit growth in Imaging, a sharp recovery in Analog and solid growth in MEMS.

Microcontrollers and Digital ICs Group (MDG) fourth quarter revenues grew 21.4% year-over-year on very strong growth for general purpose microcontrollers, in part offset by lower sales of businesses undergoing phase-out. Automotive and Discrete Group (ADG) fourth quarter revenues increased 14.6% compared to the year-ago quarter on strong results for both Automotive and Power Discrete.

STM closed Wednesday's regular trading at $23.33, down $1.27 or 5.16%.