STMicroelectronics reported financial results for the first quarter ended March 28, 2020, including first quarter net revenues of $2.23 billion, gross margin of 37.9%, operating margin of 10.4%, and net income of $192 million or $0.21 diluted earnings per share.
Jean-Marc Chery, STMicroelectronics President & CEO, commented: "In the first quarter of 2020, net revenues increased 7.5% year-over-year, led by higher sales of our Imaging products and growth in Analog and Microcontrollers, partially offset by lower sales in Automotive, Power Discrete and Digital. Operating margin improved to 10.4% and net income increased 7.9% to $192 million.
"Our revenues came in about 5% below the mid-point of our outlook when entering the quarter. The COVID-19 outbreak and subsequent containment measures by governments around the world brought challenges in our manufacturing operations and, especially in the last few days of the quarter, logistics. Our Q1 gross margin of 37.9% was largely in line with our mid-point target.
"We exited the first quarter with a stable net financial position of $668 million, available liquidity of $2.7 billion and available credit facilities of $1.1 billion.
"Our second quarter outlook is taking into account the declining demand environment, especially in Automotive, as well as the ongoing operational and logistics challenges due to current governmental regulations. We anticipate that all of our manufacturing sites will be operational. Some of them will run at reduced capacity, with unsaturation charges currently estimated to be about 400 basis points.
"We will drive the Company based on a plan for FY20 revenues between $8.8 billion and $9.5 billion. We plan for growth in the second half over the first half to be in the range of $340 million to $1.04 billion. Growth will be driven by already engaged customer programs and the removal of supply constraints. The growth range is linked to the evolution of the market.
"We have reduced our CAPEX plan for 2020 from $1.5 billion to a range between $1.0 billion to $1.2 billion.
"In response to the global COVID-19 pandemic, we will continue to ensure the health and safety of all our employees and to execute our business continuity plans, working with our customers, partners and the communities where we operate," Chery concluded.