STMicroelectronics Cuts Sales Guidance Amid Automotive Market Slowdown

By Mauro Orru

STMicroelectronics lowered its sales forecasts for the year after posting revenue below analysts' expectations for the first quarter amid a slowdown in demand for chips in the automotive sector.

The European chip maker said Thursday that it now expects revenue of $14 billion to $15 billion this year, compared with a previous range of $15.9 billion to $16.9.

The move comes after revenue in the first quarter slumped 18% to $3.47 billion. Analysts had forecast revenue of $3.61 billion, according to consensus estimates compiled by Visible Alpha.

Net profit plunged to $513 million from $1.04 billion. Gross profit--a closely watched metric for companies operating in the semiconductor industry--fell to $1.44 billion from $2.11 billion, generating a 41.7% gross margin.

STMicroelectronics had expected first-quarter revenue of $3.6 billion, and a gross margin of roughly 42.3%.

For the second quarter, the company is targeting revenue of $3.2 billion and a gross margin of 40%.

Write to Mauro Orru at mauro.orru@wsj.com

(END) Dow Jones Newswires

April 25, 2024 01:32 ET (05:32 GMT)

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