On April 24 local time, STMicroelectronics ("ST") reported its financial results for the first quarter of 2025, posting a sharp decline in both revenue and profit as automotive and industrial demand fell short of expectations.

Under GAAP, ST recorded net revenue of approximately $2.52 billion for the quarter, down 27.3% year-over-year and 24.2% quarter-over-quarter. Gross margin came in at 33.4%, down 8.3 percentage points year-over-year and 4.3 points sequentially. Net income plummeted 89.1% year-over-year to $56 million, and 83.6% quarter-over-quarter. Diluted earnings per share fell to $0.06, down 88.9% year-over-year and 83.8% sequentially.

Jean-Marc Chery, ST's President and CEO, said first-quarter net revenue was in line with the mid-point of the company's business outlook, with growth in personal electronics offset by weaker-than-expected automotive and industrial revenues. Due to product mix factors, gross margin landed slightly below the mid-point of guidance.

One bright spot was an improvement in the book-to-bill ratio across the company, with automotive and industrial sectors both posting ratios above one.

"While we believe the market bottomed in Q1 2025, given the ongoing uncertainty, we remain focused on controllable factors: continuing innovation, strengthening and accelerating our product and technology portfolio, focusing on advanced manufacturing technologies, and maintaining tight cost controls," Chery said. "Our global manufacturing footprint reshaping and cost base optimization initiatives are progressing well, and we reaffirm our target of achieving annualized cost savings of several hundred million dollars by the end of 2027."

Business Segment Highlights

 1. Analog, Power and Discrete, MEMS and Sensors (APMS):
Revenue and operating profit both declined significantly.

 ● Analog, MEMS and Sensors (AM&S) revenue dropped 23.9% year-over-year, mainly due to lower analog sales. Operating profit fell 66.7% to $82 million, with an operating margin of 7.7%, compared to 17.5% a year ago.

 ● Power and Discrete (P&D) revenue plunged 37.1%. Operating profit swung from $77 million to a loss of $28 million, with the margin falling from 12.1% to -6.9%.

 2. Microcontrollers, Digital ICs, and RF Products (MDRF):
Revenue and operating profit also fell sharply.

 ● Embedded Processing (EMP) revenue declined 29.1%, mainly driven by lower sales of general-purpose and automotive-grade microcontrollers. Operating profit dropped 71.5% to $66 million, with an operating margin of 8.9%, down from 22.2% a year earlier.

 ● RF and Optical Communications (RF&OC) revenue decreased 19.2%. Operating profit slid 59.0% to $43 million, with an operating margin of 13.9%, compared to 27.4% a year ago.

Q2 2025 Outlook

STMicroelectronics expects second-quarter net revenue to reach approximately $2.71 billion at the mid-point, representing a 16.2% decline year-over-year but a 7.7% increase sequentially. Gross margin is forecast at about 33.4%, plus or minus 200 basis points, with idle capacity charges expected to weigh on gross margin by around 4.2 percentage points.
The outlook assumes a EUR/USD exchange rate of approximately 1.08.

ST maintains its full-year 2025 capital expenditure plan (non-GAAP) at $2.0–2.3 billion, mainly to support its manufacturing restructuring efforts.