STMicroelectronics falls 11% after posting surprise loss

STMicroelectronics falls 11% after posting surprise loss

STMicroelectronics (EPA:STMPA), a global leader in semiconductor technology, reported a net loss of $97 million for the second quarter of 2025, marking a significant turnaround from the previous year's net income of $353 million. The company's revenue declined by 14.4% to $2.77 billion, with gross profit falling to $926 million from $1.3 billion in the same period last year. Gross margin narrowed to 33.5% from 40.1% [1].

The semiconductor manufacturer faced an operating loss of $133 million, primarily due to $190 million in impairment and restructuring charges. Excluding these charges, the company reported non-GAAP operating income of $57 million and non-GAAP net income of $57 million, with diluted earnings per share at $0.06, down from $0.38 a year earlier [2].

All product segments experienced revenue declines, with the Power and Discrete products showing the steepest drop at -22.2%. The Analog, MEMS and Sensors segment declined by 15.2%, and the Microcontrollers, Digital ICs and RF products group reported a 10.1% decline in revenue [2].

The company's operating cash flow decreased to $354 million from $702 million a year earlier, while free cash flow turned negative at $152 million compared to $159 million in the same period last year. Net capital expenditures were $465 million, with inventory rising to $3.27 billion from $2.81 billion [2].

Despite the challenging financial results, STMicroelectronics maintained a strong net financial position of $2.67 billion as of June 28, 2025. The company also paid $81 million in dividends and repurchased $92 million in shares under its buyback program [2].

For the third quarter, the company forecast net revenue of $3.17 billion, representing a 14.6% sequential increase but a 2.5% year-over-year decline, with gross margin projected at 33.5%. The outlook assumes an exchange rate of $1.14 to €1 and includes the impact of existing hedging contracts [1].

STMicroelectronics' stock fell 11% following the announcement of the second-quarter results, highlighting investor concerns over the company's financial performance and the impact of the restructuring program on its profitability.

References:
[1] https://www.investing.com/news/earnings/stmicroelectronics-swings-to-loss-in-q2-on-lower-revenue-charges-4149714
[2] https://www.stocktitan.net/news/STM/st-microelectronics-reports-2025-second-quarter-financial-269eflcu90ef.html