STMicroelectronics Shares Rise After Preliminary 4Q Revenue Exceeds Expectations

   By Mauro Orru

Shares in STMicroelectronics NV rose Friday after the European chip maker's preliminary revenue for the fourth quarter of 2020 beat its own guidance as well as analysts' forecasts, buoyed by smartphone demand as well as automotive products and microcontrollers.

At 1053 GMT, STMicroelectronics shares traded 2.9% higher at EUR33.35.

The company's preliminary net revenue of $3.24 billion for the fourth quarter exceeded its own guidance of $2.99 billion, plus or minus 350 basis points.

"Our engaged customer programs in personal electronics, as well as continuous acceleration in demand especially of automotive products and microcontrollers, were the main factors that contributed to this result," STMicroelectronics Chief Executive Jean-Marc Chery said.

Bryan Garnier analyst Frederic Yoboue said STMicroelectronics is reaping the benefits of demand from work-from-home and learn-from-home devices and strong iPhone shipments.

"We believe the iPhone 12 line-up is on the way to represent an important upgrade cycle, and we target a 12% increase in iPhone shipments in 2021," Mr. Yoboue said, adding that Apple Inc. could represent around 25% of STMicroelectronics' 2021 revenue.

The launch of Galaxy S21 smartphones by Samsung Electronics Co. should also accelerate growth in the first quarter of 2021 for STMicroelectronics, Bryan Garnier's Mr. Yoboue added, expecting a significant increase in content provided for the Galaxy S21 line up.

Analysts at Swiss bank UBS said the company's preliminary 4Q revenue figure is 7% above consensus and 9% above UBS estimates.

"Whilst the Apple upside might be pull-forward or temporary given the product cycle--we believe the upside in autos and microcontrollers units are likely to be more sustainable," UBS analysts said.

STMicroelectronics confirmed it would release 2020 results on Jan. 28.

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

(END) Dow Jones Newswires

January 08, 2021 06:14 ET (11:14 GMT)

ST Microelectronics (BIT:STM)
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