STMicroelectronics beats top-line and bottom-line estimates; initiates Q4 and FY outlook

* STMicroelectronics press release [https://seekingalpha.com/pr/20276614-stmicroelectronics-reports-2025-third-quarter-financial-results] (NYSE:STM [https://seekingalpha.com/symbol/STM]): Q3 Non-GAAP EPS of $0.29 beats by $0.07.
* Revenue of $3.19B (-1.8% Y/Y) beats by $20M.
* Net cash from operating activities was $549 million in the third quarter compared to $723 million in the year-ago quarter.
* Net Capex (non-U.S. GAAP1 ), was $401 million in the third quarter compared to $565 million in the year-ago quarter.
* Free cash flow (non-U.S. GAAP1 ) was positive $130 million in the third quarter, compared to positive $136 million in the year-ago quarter.
* “Our fourth quarter business outlook, at the mid-point, is for net revenues of $3.28 billion, increasing sequentially by 2.9%, gross margin is expected to be about 35.0%; including about 290 basis points of unused capacity charges.”
* “The mid-point of this outlook translates into full year 2025 revenues of about $11.75 billion, (VS. CONSENSUS OF $11.79B). This represents a 22.4% growth in the second half compared to the first half, confirming signs of market recovery. Gross margin is expected to be about 33.8%.” • To optimize our investments in response to the current market conditions, we have reduced our Net Capex plan, now slightly below $2 billion for FY25.”
* BUSINESS OUTLOOK: ST’s guidance, at the mid-point, for the 2025 fourth quarter is: • Net revenues are expected to be $3.28 billion VS. CONSENSUS OF $3.38B, an increase of 2.9% sequentially, plus or minus 350 basis points. • Gross margin of 35.0%, plus or minus 200 basis points. • This outlook is based on an assumed effective currency exchange rate of approximately $1.15 = €1.00 for the 2025 fourth quarter and includes the impact of existing hedging contracts. • The fourth quarter will close on December 31, 2025. This business outlook does not include any impact of potential further changes to global trade tariffs compared to the current situation.

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