Despite profit plunge, STMicroelectronics meets Q1 targets, forecasts Q2 rebound with $2.71 billion revenue as chip sector begins slow recovery. Shares jump 4 per cent.
STMicroelectronics, one of Europe’s top semiconductor manufacturers, has posted its first-quarter 2025 results, meeting expectations despite a steep downturn. Revenues reached $2.52 billion, in line with the company’s forecast and analyst estimates. Net income came in at $56 million, while the gross margin was reported at 33.4 per cent.
The company confirmed that Q1 marked the low point of the year and is now forecasting improved performance in the coming months. It expects second-quarter revenue to rise to $2.71 billion—still 16.2 per cent below the same period last year but ahead of analyst predictions of $2.62 billion.
STMicro’s shares jumped as much as 4 per cent following the announcement, making it the top performer on France’s CAC 40 index.
The firm, along with other chipmakers like NXP and Siltronic, has been hit hard by a prolonged slump in the automotive and industrial sectors. As a result, STMicro’s operating income plummeted by 99.5 per cent year-on-year in Q1, while net income dropped 89.1 per cent. Inventories also rose sharply, reaching 167 days of sales compared to 122 days at the end of Q4 2024.
Despite not providing a full-year outlook, the company remains optimistic. In a report by The Economic Times, President and CEO Jean-Marc Chery said the focus is on innovation and improving competitiveness through technology development, even amid economic uncertainty and ongoing inventory corrections.
STMicro is undertaking a strategic programme to reshape its manufacturing footprint and reduce costs, aiming for significant savings by 2027. The firm believes the sector is entering an early-stage cyclical recovery that should strengthen in the second half of 2025 and into 2026, regardless of global economic headwinds.
Analysts from Jefferies echoed this sentiment, noting signs of recovery in the industrial chip market—a view also supported by US peer Texas Instruments.
