STMicroelectronics nearly doubles quarterly operating profit — Channel NewsAsia

Chipmaker STMicroelectronics reported third-quarter operating profit excluding one-off costs of $429 million — nearly twice as much as a year earlier. The figure also exceeded the $400.5 million forecast of analysts surveyed by LSEG, Channel NewsAsia reports.

Fourth-quarter forecast

The Franco-Italian company expects fourth-quarter revenue of $4.15 billion, with a possible deviation of 3.5%. Sales reached $3.76 billion in the third quarter. STMicroelectronics' forecast is above the expectations of LSEG analysts, who projected revenue of $4.10 billion.

Chief Executive Jean-Marc Chery said demand continues to significantly exceed supply, while the company is expanding production capacity in line with its strategic roadmap. Back in July, STMicroelectronics said its fourth-quarter sales would exceed $4 billion.

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Demand from data centers

The company produces microcontrollers, sensors and power semiconductors for cars, industry and smartphones. Better-than-expected results were driven by increased sales of communications equipment, computer peripherals and personal electronics.

According to Chery, the market recovery is additionally supported by demand from artificial intelligence data centers and low Earth orbit satellite communications. STMicroelectronics' gross margin rose to 37.3% in the third quarter from 33.2% a year earlier. The company expects it to be around 39% in the fourth quarter.

Jefferies analysts forecast STMicroelectronics' continued growth in 2027. They expect the company's data-center revenue to approximately double next year, while gross margin will have more substantial upside potential at the end of next year.