The third half of StMicroeletronics closes badly: the profit is 71 million dollars, when a year ago in the same period it amounted to 198 million. The analysts' estimate was 84 million. Revenues were also bad, dropping by 8,3% to 2,44 billion dollars while a result of 2,48 billion was expected.
The disappointing expectations for the fourth quarter also weigh. For revenues, a result of between 2,15 and 2,3 billion is expected, although the consensus estimate was 2,52. Estimates on the "gross margin" (revenues minus production costs) are around 33,5% and here too the consensus was 37%. Overall, Stm had closed the first nine months with revenues up by 0,4%.
These results, which were decidedly worse than the expectations provided by analysts, led to huge sales on the market: in Piazza Affari, the stock dropped 7% to 5,08 euros.
A decline was expected this quarter but not of this size. The Chairman and Carlo Bozotti try to provide an explanation: “We entered the third quarter preparing ourselves to face a difficult market situation, with a much lower than expected business volume at one of the main customers and inventory corrections already underway. As a result of these factors, third quarter results were broadly in line with our expectations: net revenues decreased 4,9% sequentially and gross margin was 35,8%.
