STM ST Microelectronics

By Mauro Orru

Shares of STMicroelectronics NV (STM.FR) jumped on Thursday as results for the fourth quarter of 2019 and guidance for the first quarter of 2020 exceeded expectations.

The European semiconductor chip maker said fourth-quarter revenue rose 4% year-on-year to $2.75 billion, spurred by higher sales across the analog, microcontrollers, imaging and MEMS divisions.

STMicroelectronics shares traded 6.6% higher at EUR27.03 at 0947 GMT.

Analysts at Citi said revenue exceeded its expectations of $2.68 billion, as did the gross margin, which came in at 39.3% compared with the U.S. bank's estimate of 38.2%.

However, quarterly net profit fell 6.2% year-on-year to $392 million, with income-tax expenses of $62 million.

STMicroelectronics said it expects net revenue of $2.36 billion for the first quarter of 2020, a 13.7% year-on-year increase.

The company also plans to invest roughly $1.5 billion in capex for 2020, it added.

"The outlook for 1Q 2020 and that on capex should justify, in our view, a positive review of the sales estimate for 2020 (our estimate and consensus up 8%)," said Gianmarco Bonacina, analyst at Italian investment bank Equita Sim.

Frederic Yoboue, analyst at European investment bank Bryan Garnier said the investment in capex is also above its forecast of $1.37 billion, adding this should highlight strategic initiatives such as the next generation of imaging sensor technologies.

Write to Mauro Orru at mauro.orru@wsj.com; @MauroOrru94

(END) Dow Jones Newswires

January 23, 2020 05:03 ET (10:03 GMT)

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