Research, Charts & Company Announcements
Research Tree provides access to ongoing research coverage, media content and regulatory news on STMICROELECTRONICS NV. We currently have 6 research reports from 1 professional analysts.
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Inflection point towards growth, backed by positive gross margin forecasts
27 Oct 16
STMicroemectronics reported Q3 revenues of $1,797m, up 5.5% sequentially and 1.9% yoy. Although every business apart from ADG (-2.4%) grew sequentially (7.2% for Analog & MEMS, 5.6% for Microcontrollers & Digital), in yoy figures the main business units displayed a slight decrease in revenues, most of the growth coming from the Other business unit ($103m, +106% sequentially and 80.1% yoy). The gross margin reached 35.8%, a sequential increase of 190bp despite a negative impact of 60bp of unused capacity charges. Opex reached $553m, a moderate increase vs. the previous quarter, while the opex net of grants, impairments and restructuring decreased by $23m. This led to an operating profit of $90m (corresponding to a 5% operating margin), and to a net income of $71m. Concerning the second quarter of the year, the company forecasts a 3.2% increase sequentially at the midpoint, and a gross margin of 37%.
Encouraging guidance, but will need confirmation
27 Jul 16
STMicroemectronics reported Q1 revenues of $1,703m, up 5.6% sequentially but down 3.2% yoy. Every business grew sequentially (1.9% for Analog & MEMS, 4.5% for Microcontrollers & Digital and 7.5% for Automotive & Discrete), but Analog & MEMS witnessed a 15.5% drop yoy, while the other businesses were relatively flat. The gross margin reached 33.9%, a sequential increase of 50bp despite a negative impact of 45bp of unused capacity charges. Opex reached $549m, a net decrease vs. the previous quarter, while the opex net of grants, impairment and restructuring decreased by $6m. This led to an operating profit of $28m, and a net income of $23m. Concerning the second quarter of the year, the company forecasts a 5.5% increase sequentially at the midpoint, and a gross margin of 35.5%.
Positive outlook but results remain delicate
28 Apr 16
STM reported Q1 revenues of $1,613m, down 3.3% sequentially and 5.4% yoy. The company unveiled a new reporting system, now composed of three divisions: Automotive & Discrete Group (ADG), Analog & MEMS Group (AMG) and Microcontrollers & Digital ICs Group (MDG). According to restated figures, ADG was up sequentially (5.4%) but flat yoy, AMG flat sequentially and down yoy (-17.1%) and MDG down sequentially (-13.4%) and flat yoy. The gross margin reached 33.4%, a sequential increase of 10bp despite a negative impact of 60bp of unused capacity charges. Opex reached $571m, a net increase vs. the previous quarter, although opex net of grants, impairment and restructuring actually decreased by $12m. This led to an operating loss of $33m, the first since Q1 15 (-$19m), and a net loss of $41m. Concerning the second quarter of the year, the company forecasts a 5.5% increase sequentially at the midpoint, and a gross margin at 34%.
Restructuring of the digital business finally announced, but much work remains
27 Jan 16
STM reported Q3 revenues of $1,668m, down 5.4% sequentially and 8.8% yoy. As in the previous quarter, every segment suffered but MMS (+7.3% sequentially, +13.9% yoy). Three segments decreased by more than 10% yoy: Industrial (-15.1%), DPG (-18.1%) and Analog, MEMS & Sensors (-22.2%). The gross margin reached 33.5%, a sequential decrease of 130bp, reflecting the impact of unused capacity charges of about 180bp and price pressure. Opex reached $534m, a slight increase vs. the previous quarter mostly due to seasonality and despite favorable currency effects, leading to an operating margin of 1.5% including impairments & restructuring (1.9% excluding these charges). The company announced a progressive exit from the set-top box business: 1,400 jobs will be lost worldwide, of which 1,000 in 2016, while 430 jobs are concerned in France through a voluntary departure plan. Annualized savings are expected to be $170m, and restructuring costs $170m. Concerning the first quarter of the year, the company forecasts a 3% decrease sequentially at the midpoint, and a lower gross margin at 33% due to persistent unused capacity charges and despite adjustments in the manufacturing plan. The business lines will also be reorganized into three divisions: Automotive and Discrete Group (ADG), Microcontrollers and Digital IC’s Group (MDG) and Analog and MEMS Group (AMG).
Soft results and guidance, clear trigger expected soon with DPG
29 Oct 15
STM reported Q3 revenues of $1,764m, flat sequentially but down by 6.5% yoy. Every segment suffered but Microcontrollers (+6.2% sequentially, +9.3% yoy), while Automotive grew sequentially (+2.1%) but was down yoy (-3.7%). The fall was particularly sharp in Industrial (-10.1% yoy) and in Analog, MEMS & Sensors (-14.7% sequentially, -13.1% yoy). The gross margin reached 34.8%, a sequential increase of 100bp, thanks to favourable mix and currency effects. Opex reached $522m, a net decrease vs. the previous quarter due to seasonality, a favourable mix and currency effects, leading to an operating margin of 5.2% including impairments & restructuring (5.8% excluding these charges). Concerning the final quarter of the year, the company forecasts a 6% decrease sequentially at the midpoint, and a lower gross margin at 33.5% despite adjustments in the manufacturing plan. Concerning the digital division, the final decision is expected by early 2016.
Results in line with expectations, margins positive again but still desperately weak
23 Jul 15
STMicroelectronics reported its Q2 revenues, which reached $1.76bn, corresponding to a 3.2% sequential increase but to a 5.6% decrease yoy. Every segment decreased yoy, with the exception of AMS, which displayed 3.1% growth. The DPG business decreased by 20.7% yoy, but was flat sequentially. The gross margin came in at 33.8%, a 40bp sequential increase due to favourable currency effects (net of hedging) and lower unused capacity charges. Operating expenses reached $583m, leading to an operating income of $12m, corresponding to a 0.7% operating margin. FCF was positive at $53m, and net income at $35m. The company communicated a mixed guidance, with an increase in revenues of about 2.5% (+/- 3.5%), and a gross margin at 35% (+/- 2%).
Taking a prudent road
28 Nov 16
As flagged in September, H1 2017 profit is indeed below LY; adj. PBT of £0.5m compares with £1.5m in H1 2016 as Trakm8 invests heavily in new technology and acquisition integration. Management remains confident in another very strong H2 performance and in particular is focused on closing a couple of large high-margin software-related sales which would see the group meeting the original FY 2017 expectations of £5.9m adj. PBT. However, should these fall outside the March year-end, profits are only likely to be in line with last year’s £3.9m, albeit on a growing revenue base. Prudence dictates we assume a worst-case scenario in our forecasts so that surprise is only in the upside – if the deals close in the year, the company will meet those original revenue and profit expectations.
N+1 Singer - Morning Song 30-11-2016
30 Nov 16
Sanderson has delivered full year results in line with expectations and the 19 October trading update after a strong finish to the year compensated for a slower start. A healthy level of pre-contracted recurring revenue (50%), incremental sales to existing customers and new customer wins at higher average order values helped deliver solid revenue growth in both the Digital Retail (+9%) and Enterprise (+12%) divisions. A decent order book and good sales momentum suggest that the company is on track to deliver on unchanged profit expectations for the current year. We continue to view the valuation (FY17 EV/EBITDA 8.6x) as undemanding given an attractive combination of accelerating growth potential, strong cash generation and growing dividends.
A data-driven H1 raises expectations
05 Dec 16
The first reporting period under the new D4t4 Solutions brand saw the group (previously IS Solutions) deliver good growth, leaving it well on track to meet PBT forecasts in FY 2017, and we now increase FY 2018 forecasts. The business continues to flourish from its focus on data management and analytics, enabling its international blue-chip client base to gather and gain advantage from the mass of customer data available, utilising the leading-edge Celebrus solution. Industry analysts predict 12% CAGR for the BI & Analytics market through to 2020, and D4t4 is riding this wave of demand.
06 Dec 16
600 Group* (SIXH): Interim results: order book showing signs of improvement (CORP) | Real Good Food* (RGD): Commodity volatility impacts numbers (CORP) | Minds + Machines* (MMX): .vip goes live in China (CORP | Imaginatik* (IMTK): Interims (CORP) | iomart* (IOM): Quality business as usual (CORP) | Fulcrum (FCRM): Upgrades continue (BUY)
N+1 Singer - Morning Song 05-12-2016
05 Dec 16
RTHM is acquiring a profitable Canadian listed mobile specialist for equivalent of US$42.5m consideration in shares (88.235m). This helps adds to two growth vectors RTHM is targeting; (i) adds unique exclusive audience (10m unique) and (ii) Exclusive demand Yahoo and Facebook. The business has 15 premium and owned and operated apps which provide users with rewards for activity. The business is expected to deliver c$9m of EBITDA in FY18 including $2m of cost synergies. This equates to just 4.7x EV/EBITDA. This marks what we see the first step in RTHM activity to scale the business and deliver on margin potential (see our initiation notes). Our initial estimates for EPS revisions are very significant - for FY18 are 2.3 cents (currently 0.6) and for FY19 4.3 (currently 2.5). There is a call at 830 for investors and we will revise post this.
Joy of Techs
21 Nov 16
ICT evolution is driven by technological development as advances are made which both meet and shape customer requirements. Our 2011 note No such thing as a telco described the modern reality in that former ‘telcos’ now deliver varying elements of a range of managed services. We built on this theme last year, exploring in further detail their evolutionary paths, operating fundamentals, and cashflow yield similarities. In the consumer environment, demand for bundles of technology is complemented by demand for content. Across the pond, the mooted combination of AT&T and Time Warner typifies the bundled need of ‘pipe’ and content, since unbundled alternatives such as FaceTime and WhatsApp can be easier and clearer to chat over, and Amazon and Netflix are easier to watch anywhere. In the UK, BT’s defensive actions cover delivery, content and capabilities, acquiring EE yet also buying football rights. While TV was long ago added to triple play to become quad play, voice is now merely an app, and fixed and mobile seen as just dumb pipes: it's the content that will influence consumer choices. Growth of TV and film as well as music and gaming over IP leads to UK small cap opportunities. In context of the drive to maximise value from pipes and access by offering content and data, we look at some amongst the potential tech small cap beneficiaries: Amino*, Keyword Studios, ZOO Digital*, 7digital*, KCOM* and CityFibre*.