FILE PHOTO: The logo of electronics and semiconductors manufacturer STMIcroelectronics is seen outside a company building in Montrouge, near Paris, France, July 12, 2022. REUTERS/Sarah Meyssonnier/File Photo
(Reuters) -STMicroelectronics forecast improving sales for the second quarter on Thursday after its first-quarter result, which the chipmaker called the bottom point of the year, met its earlier expectations.
The company's shares rose as much as 4% in early trading to the top of France's main index CAC 40.
Chipmakers exposed to the automotive and industrial markets, like STMicro, NXP and Siltronic, have faced a multi-year long slump in sales. That led STMicro's operating income to collapse 99.5% year-on-year in the first quarter.
One of Europe's largest chipmakers expects revenue of $2.71 billion in the second quarter, 16.2% lower than last year but above analysts' expectations of $2.62 billion. The outlook does not factor in any impact from potential further changes to global trade tariffs, STMicro said.
"We believe the auto/industrial chip sector is at the early stages of a cyclical recovery from a deep trough, with improvement into H2-25 and 2026 regardless of macro-uncertainties," Jefferies analysts wrote in their first take on the earnings statement.
It reported revenue of $2.52 billion for the first quarter, in line with its own forecast of $2.51 billion. Analysts were expecting a similar number according to LSEG.
"In the current uncertain environment we are focusing on what we can control: keep on innovating to continuously improve and accelerate the competitiveness of our product and technology portfolio," STMicro's President and CEO Jean-Marc Chery said in the statement.
STMicro did not provide a full-year guidance. It had said in January that it was too early to guide for 2025 due to poor visibility and a persisting inventory correction among customers.
STMicro's inventories rose even further over the first quarter to 167 days worth of sales, versus 122 days at the end of last quarter.
On Wednesday, U.S. chipmaker Texas Instruments also forecast second-quarter revenue above Wall Street estimates, seeing a cyclical recovery in industrial demand across all segments and geographies.
(Reporting by Nathan Vifflin in Gdansk, editing by Milla Nissi)
