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Aided by Apple, STM results top forecasts as it raises outlook

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Aided by Apple, STM results top forecasts as it raises outlook

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By Eric Auchard LONDON (Reuters) – Franco-Italian chipmaker STMicroelectronics <STM.PA> reported third-quarter revenue and net profits that topped analysts’ forecasts, helped by a key customer believed to be Apple <AAPL.O>, and raised its year-end outlook. STMicro posted net revenue of $2.14 billion, up 18.9 percent year-over-year, putting the diversified chipmaker on track to deliver 18 percent growth in 2017, it said. This will mark the first year it has shown solid double-digit growth since 2010. The company generated double-digit sales growth across all four of its business lines compared to the year-ago quarter. All major regions grew by double digits both compared to a year ago and sequentially between the second and third quarter. The stand out performance came in its imaging business, where sales more than doubled in the last three months to $158 million. Demand in this division began to ramp up for new Time of Flight sensors, which a key customer – which analysts widely agree is Apple <AAPL.O> – is buying as a proximity or motion detector to use in its latest iPhones. Third-quarter gross margins rose to 39.5 percent, slightly above the 39 percent target, on average, that the company had set out in July. It said fourth-quarter margins were set to rise to around 39.9 percent, plus or minus 2 percentage points. “We see clear opportunities in front of us to continue to drive revenue growth, margin expansion and shareholder value and we are determined to capture this additional potential,” Chief Executive and President Carlo Bozotti said in a statement. Net profit attributable to the parent company more than tripled to $236 million from $71.0 million in the year-ago quarter. That easily topped analysts forecasts which ranged from $210-$220 million, according to a Thomson Reuters poll.

(Reporting by Eric Auchard; Editing by Sudip Kar-Gupta)
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