Stmicroelectronics, the semiconductor company controlled by the Italian Ministry of Economy and the French public bank Bpifrance, reported overall good and better-than-expected results for the first quarter of 2026, also stating it expects further growth in the subsequent period.
HOW STMICROELECTRONICS PERFORMED AND WHAT ANALYSTS EXPECTED
The company recorded revenues of 3.10 billion dollars in the first three months of the year, while analysts expected a slightly lower figure, of 3.04 billion. Operating income also exceeded expectations: 171 million instead of 165.8 million.
As for the forecasts for the second quarter of 2026, Stmicroelectronics expects to report revenues of 3.45 billion: market estimates stand at 3.21 billion.
FIRST QUARTER 2026 RESULTS, IN DETAIL
Stmicroelectronics’ net revenues in the first quarter of 2026, at 3.1 billion, mark a 23 percent year-on-year growth; “on a sequential basis,” however, “net revenues decreased by 7.0 percent,” reads the statement.
The gross margin was 33.8 percent, forty basis points higher year-on-year, “mainly thanks to reduced costs related to unused capacity and a better product mix.” Operating income was 70 million dollars.
WHAT DID NOT GO WELL
Not everything was positive, though.
Net profit fell to 37 million compared to 56 million in the first quarter of 2025, while diluted earnings per share dropped to 0.04 dollars from 0.06 dollars. Free cash flow was negative at 723 million, whereas a year earlier it was positive, at 30 million. Finally, the net financial position, at 2 billion, decreased compared to 2.7 billion at the end of December.
CHERY’S WORDS ON ARTIFICIAL INTELLIGENCE
CEO Jean-Marc Chery stated that Stmicroelectronics is “strategically positioned to seize the benefits derived from new programs based on artificial intelligence, leveraging specialized technologies to support the continuously evolving artificial intelligence infrastructure.”
Revenue forecasts for the data center segment should “significantly” exceed 500 million in 2026 and stand “well” above 1 billion in 2027. The 1 billion target was originally expected for 2030.
BARCLAYS’ ANALYSIS
“Expectations were high and we believe revenue forecasts are better than expected,” Barclays bank said in a note referring to the first quarter results and second quarter estimates. “One might wonder why gross margins are not better, given price increases and expected growth, but we believe today revenue strength will prevail over this aspect.”
However, the automotive sector – a relevant market for Stmicroelectronics – “remains weak,” according to Barclays, while consumer electronics “risks some downward revisions, although Stm’s consumer electronics division should prove slightly more resilient than others.”
