STMicroelectronics N.V. Q1 2021 Financial Summary
Business Context and Reporting Period
This Form 6-K filing, dated April 29, 2021, reports the unaudited U.S. GAAP financial results for STMicroelectronics N.V. for the first quarter ended April 3, 2021. The company is a global semiconductor leader serving automotive, industrial, and consumer electronics markets.
Key Financial Metrics
| Metric | Q1 2021 | Q1 2020 | Q4 2020 |
|---|---|---|---|
| Net Revenues | $3.02 billion | $2.23 billion | $3.24 billion |
| Gross Margin | 39.0% | 37.9% | 38.8% |
| Operating Income | $440 million | $231 million | $657 million |
| Operating Margin | 14.6% | 10.4% | 20.3% |
| Net Income | $364 million | $192 million | $582 million |
| Diluted EPS | $0.39 | $0.21 | $0.63 |
| Free Cash Flow (Non-GAAP) | $261 million | $113 million | $512 million |
| Capital Expenditures (Net) | ($405 million) | ($266 million) | ($381 million) |
| Total Liquidity | $4.16 billion | $2.71 billion | $3.72 billion |
| Total Financial Debt | $2.97 billion | $2.04 billion | $2.62 billion |
| Net Financial Position | $1.19 billion | $668 million | $1.10 billion |
Material Changes vs. Prior Periods
- Year-Over-Year Growth: Net revenues increased 35.2% driven by demand acceleration across all product groups. Operating margin expanded 420 basis points to 14.6%, and net income surged 89.6%.
- Sequential Decline: Revenues decreased 6.8% sequentially, primarily due to seasonality in Personal Electronics, though the result was 270 basis points above the company's mid-point guidance.
- Product Group Performance:
- Automotive and Discrete Group (ADG): Revenue up 9.4% sequentially and 38.4% year-over-year; operating profit up 280.4%.
- Analog, MEMS and Sensors (AMS): Revenue down 23.7% sequentially due to seasonality, but up 27.1% year-over-year.
- Microcontrollers and Digital ICs (MDG): Revenue up 3.2% sequentially and 42.2% year-over-year.
- Balance Sheet: Inventory increased to $1.84 billion (91 days sales of inventory), up from $1.77 billion in the prior year. Net financial position improved to $1.19 billion.
Guidance, Outlook, and Risks
- Q2 2021 Outlook: Management expects net revenues of $2.9 billion (mid-point), representing a 3.8% sequential decrease and 39% year-over-year increase. Gross margin is expected to be approximately 39.5%.
- FY2021 Plan: Full-year revenue guidance is set at $12.1 billion (plus or minus $150 million), implying an 18.4% year-over-year increase. Planned CAPEX for 2021 is approximately $2.0 billion.
- Shareholder Returns: The company paid $38 million in dividends and executed $156 million in share buybacks during the quarter.
- Risks and Contingencies: Key risks include global trade policy changes, macroeconomic uncertainty, supply chain constraints (equipment and raw materials), currency exchange rate volatility, and the ongoing impact of the COVID-19 pandemic on global operations and demand.
Investor Verification Checklist
- Verify the reconciliation of Non-U.S. GAAP Free Cash Flow ($261 million) to U.S. GAAP cash flows in the Appendix.
- Confirm the impact of currency exchange rates (assumed $1.18 = €1.00 for Q2) on future guidance.
- Review the specific drivers of the sequential revenue decline in the Analog, MEMS, and Sensors group versus the growth in Automotive and Microcontrollers.
- Assess the sustainability of the 39.0% gross margin given the planned increase in CAPEX to $2.0 billion for the year.
- Monitor inventory levels ($1.84 billion) and days sales of inventory (91 days) relative to supply chain constraints.