By Mauro Orru 
 

STMicroelectronics NV said Wednesday that net profit and revenue in the first quarter of 2020 increased year-on-year as higher sales of its imaging products as well as growth in analog and microcontrollers partially offset lower sales in automotive, power discrete and digital.

The European chip maker said net profit for the quarter rose to $192 million from $178 million the previous year, with operating profit for the same period jumping to $231 million from $211 million.

Analysts were expecting quarterly net profit to come in at $189 million, according to FactSet.

Operating margin rose to 10.4% from 10.2%, although gross margin fell to 37.9% from 39.4%.

First-quarter revenue climbed to $2.23 billion from $2.08 billion for the first quarter of 2019, still below the $2.36 billion which STMicroelectronics was expecting in January before the coronavirus pandemic spread to Europe and the U.S.

Analysts polled by FactSet expected revenue of $2.28 billion for the quarter.

"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," Chief Executive Jean-Marc Chery said.

The company said it expects revenue of $2 billion in the second quarter at mid-point, with a gross margin of around 34.6%, plus or minus 200 basis points.

STMicroelectronics reduced its 2020 capex to between $1 billion and $1.2 billion from $1.5 billion.

Mr. Chery said the company would move forward based on a plan for 2020 revenue of between $8.8 billion and $9.5 billion.

The company said the supervisory board would propose a cut for the 2019 dividend to $0.168 a share from $0.24 at the annual general meeting on June 17, with the authorization to consider an increase up to a maximum of $0.24 a share during September 2020.

 

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

 

(END) Dow Jones Newswires

April 22, 2020 01:43 ET (05:43 GMT)

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