STMicroelectronics Reports Q4 and FY 2023 Financial Results
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STMicroelectronics Reports Q4 and FY 2023 Financial Results

PR No: C3230C

STMicroelectronics Reports Q4 and FY 2023 Financial Results

Geneva, January 25, 2024 – STMicroelectronics N.V. (“ST”) (NYSE: STM), a global semiconductor leader serving customers across the spectrum of electronics applications, reported U.S. GAAP financial results for the fourth quarter ended December 31, 2023. This press release also contains non-U.S. GAAP measures (see Appendix for additional information).

ST reported fourth quarter net revenues of $4.28 billion, gross margin of 45.5%, operating margin of 23.9%, and net income of $1.08 billion or $1.14 diluted earnings per share.

Jean-Marc Chery, ST President & CEO, commented:

Quarterly Financial Summary (U.S. GAAP)

(US$ m, except per share data) Q4 2023 Q3 2023 Q4 2022 Q/Q Y/Y
Net Revenues $4,282 $4,431 $4,424 -3.4% -3.2%
Gross Profit $1,949 $2,109 $2,102 -7.6% -7.3%
Gross Margin 45.5% 47.6% 47.5% -210 bps -200 bps
Operating Income $1,023 $1,241 $1,287 -17.5% -20.5%
Operating Margin 23.9% 28.0% 29.1% -410 bps -520 bps
Net Income $1,076 $1,090 $1,248 -1.3% -13.8%
Diluted Earnings Per Share $1.14 $1.16 $1.32 -1.7% -13.6%

  
Annual Financial Summary (U.S. GAAP)

(US$ m, except earnings per share data) FY2023 FY2022 Y/Y
Net Revenues $17,286 $16,128 7.2%
Gross Profit $8,287 $7,635 8.5%
Gross Margin 47.9% 47.3% 60 bps
Operating Income $4,611 $4,439 3.9%
Operating Margin 26.7% 27.5% -80 bps
Net Income $4,211 $3,960 6.3%
Diluted Earnings Per Share $4.46 $4.19 6.4%

Fourth Quarter 2023 Summary Review

Net Revenues By Product Group (US$ m) Q4 2023 Q3 2023 Q4 2022 Q/Q Y/Y
Automotive and Discrete Group (ADG) 2,060 2,025 1,696 1.7% 21.5%
Analog, MEMS and Sensors Group (AMS) 993 990 1,339 0.4% -25.8%
Microcontrollers and Digital ICs Group (MDG) 1,225 1,412 1,383 -13.3% -11.5%
Others 4 4 6 - -
Total Net Revenues $4,282 4,431 4,424 -3.4% -3.2%

Net revenues totaled $4.28 billion, representing a year-over-year decrease of 3.2%. On a year-over-year basis, ADG revenues increased 21.5%, while AMS and MDG decreased 25.8% and 11.5% respectively. Year-over-year net sales to OEMs and Distribution decreased 0.4% and 9.2%, respectively. On a sequential basis, net revenues decreased 3.4%, 40 basis points lower than the mid-point of ST’s guidance. On a sequential basis, ADG reported an increase in net revenues, AMS was stable and MDG decreased.

Gross profit totaled $1.95 billion, representing a year-over-year decrease of 7.3%. Gross margin of 45.5%, 50 basis points below the mid-point of ST’s guidance, decreased 200 basis points year-over-year, due to higher input manufacturing costs, unused capacity charges, and negative currency effect net of hedging, partially offset by the combination of sales price and product mix.

Operating income decreased 20.5% to $1.02 billion, compared to $1.29 billion in the year-ago quarter. ST’s operating margin decreased 520 basis points on a year-over-year basis to 23.9% of net revenues, compared to 29.1% in the fourth quarter of 2022.

By product group, compared with the year-ago quarter:

Automotive and Discrete Group (ADG):

Analog, MEMS and Sensors Group (AMS):

Microcontrollers and Digital ICs Group (MDG):

Net income decreased to $1.08 billion compared to $1.25 billion in the year-ago quarter. Both the fourth quarter 2023 and the fourth quarter 2022 financial results included one-time non-cash income tax benefits of $191 million and $141 million respectively. Diluted earnings per share decreased to $1.14 compared to $1.32 in the year-ago quarter.

Cash Flow and Balance Sheet Highlights

        Trailing 12 Months
(US$ m) Q4 2023 Q3 2023 Q4 2022 Q4 2023 Q4 2022 TTM Change
Net cash from operating activities 1,480 1,881 1,550 5,992 5,202 15.2%
Free cash flow (non-U.S. GAAP)1 652 707 603 1,774 1,591 11.5%

Net cash from operating activities was $1.48 billion in the fourth quarter compared to $1.55 billion in the year-ago quarter. For the full-year 2023, net cash from operating activities increased 15.2% to $5.99 billion, representing 34.7% of total revenues.

Capital expenditure payments, net of proceeds from sales, capital grants and other contributions, were $798 million in the fourth quarter and $4.11 billion for the full year 2023. In the respective year-ago periods, net capital expenditures were $920 million and $3.52 billion.

Free cash flow (non-U.S. GAAP) was $652 million and $1.77 billion in the fourth quarter and full year, respectively, compared to $603 million and $1.59 billion in the year-ago respective periods.

Inventory at the end of the fourth quarter was $2.70 billion, compared to $2.87 billion in the previous quarter and $2.58 billion in the year-ago quarter. Days sales of inventory at quarter-end was 104 days compared to 114 days in the previous quarter and 101 days in the year-ago quarter.

In the fourth quarter, ST paid cash dividends to its stockholders totaling $60 million and executed a $86 million share buy-back as part of its current share repurchase program.

ST’s net financial position (non-U.S. GAAP) was $3.16 billion as of December 31, 2023, compared to $2.46 billion as of September 30, 2023 and reflected total liquidity of $6.08 billion and total financial debt of $2.93 billion. Adjusted net financial position, taking into consideration the effect on total liquidity of advances from capital grants for which capital expenditures have not been incurred yet, stood at $3.00 billion as of December 31, 2023.

Corporate developments

On January 10, 2024, ST announced a new organization to deliver enhanced product development innovation and efficiency, time-to-market as well as customer focus by end market. ST will be re-organized into two Product Groups, split into four Reportable Segments and the existing sales and marketing organization will be complemented by a new application marketing organization focused by end markets across all Regions.
The new organization implies a change in reporting which will apply from January 1, 2024.

Business Outlook

ST’s guidance, at the mid-point, for the 2024 first quarter is:

Conference Call and Webcast Information

ST will conduct a conference call with analysts, investors and reporters to discuss its fourth quarter and full year 2023 financial results and current business outlook today at 9:30 a.m. Central European Time (CET) / 3:30 a.m. U.S. Eastern Time (ET). A live webcast (listen-only mode) of the conference call will be accessible at ST’s website, https://investors.st.com, and will be available for replay until February 9, 2024.

Use of Supplemental Non-U.S. GAAP Financial Information

This press release contains supplemental non-U.S. GAAP financial information.

Readers are cautioned that these measures are unaudited and not prepared in accordance with U.S. GAAP and should not be considered as a substitute for U.S. GAAP financial measures. In addition, such non-U.S. GAAP financial measures may not be comparable to similarly titled information from other companies. To compensate for these limitations, the supplemental non-U.S. GAAP financial information should not be read in isolation, but only in conjunction with ST’s consolidated financial statements prepared in accordance with U.S. GAAP.

See the Appendix of this press release for a reconciliation of ST’s non-U.S. GAAP financial measures to their corresponding U.S. GAAP financial measures.

Forward-looking Information

Some of the statements contained in this release that are not historical facts are statements of future expectations and other forward-looking statements (within the meaning of Section 27A of the Securities Act of 1933 or Section 21E of the Securities Exchange Act of 1934, each as amended) that are based on management’s current views and assumptions, and are conditioned upon and also involve known and unknown risks and uncertainties that could cause actual results, performance, or events to differ materially from those anticipated by such statements, due to, among other factors:

Such forward-looking statements are subject to various risks and uncertainties, which may cause actual results and performance of our business to differ materially and adversely from the forward-looking statements. Certain forward-looking statements can be identified by the use of forward looking terminology, such as “believes,” “expects,” “may,” “are expected to,” “should,” “would be,” “seeks” or “anticipates” or similar expressions or the negative thereof or other variations thereof or comparable terminology, or by discussions of strategy, plans or intentions.

Some of these risks are set forth and are discussed in more detail in “Item 3. Key Information — Risk Factors” included in our Annual Report on Form 20-F for the year ended December 31, 2022 as filed with the Securities and Exchange Commission (“SEC”) on February 23, 2023. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in this press release as anticipated, believed, or expected. We do not intend, and do not assume any obligation, to update any industry information or forward-looking statements set forth in this release to reflect subsequent events or circumstances.

Unfavorable changes in the above or other risks or uncertainties listed under “Item 3. Key Information — Risk Factors” from time to time in our SEC filings, could have a material adverse effect on our business and/or financial condition.

About STMicroelectronics

At ST, we are over 50,000 creators and makers of semiconductor technologies mastering the semiconductor supply chain with state-of-the-art manufacturing facilities. An integrated device manufacturer, we work with more than 200,000 customers and thousands of partners to design and build products, solutions, and ecosystems that address their challenges and opportunities, and the need to support a more sustainable world. Our technologies enable smarter mobility, more efficient power and energy management, and the wide-scale deployment of cloud-connected autonomous things. We are committed to achieving our goal to become carbon neutral on scope 1 and 2 and partially scope 3 by 2027.
Further information can be found at www.st.com.

For further information, please contact:

INVESTOR RELATIONS:
Céline Berthier
Group VP, Investor Relations
Tel: +41 22 929 58 12
celine.berthier@st.com

MEDIA RELATIONS:
Alexis Breton
Corporate External Communications
Tel: + 33 6 59 16 79 08
alexis.breton@st.com

STMicroelectronics N.V.      
CONSOLIDATED STATEMENTS OF INCOME      
(in millions of U.S. dollars, except per share data ($))      
       
  Three months ended  
  December 31, December 31,  
  2023 2022  
  (Unaudited) (Unaudited)  
       
Net sales 4,262 4,408  
Other revenues 20 16  
NET REVENUES 4,282 4,424  
Cost of sales (2,333) (2,322)  
GROSS PROFIT 1,949 2,102  
Selling, general and administrative (416) (378)  
Research and development (521) (472)  
Other income and expenses, net 11 35  
Total operating expenses (926) (815)  
OPERATING INCOME 1,023 1,287  
Interest income, net 57 33  
Other components of pension benefit costs (5) (3)  
INCOME BEFORE INCOME TAXES AND NONCONTROLLING INTEREST 1,075 1,317  
Income tax (expense) benefit 6 (66)  
NET INCOME 1,081 1,251  
Net income attributable to noncontrolling interest (5) (3)  
NET INCOME ATTRIBUTABLE TO PARENT COMPANY STOCKHOLDERS 1,076 1,248  
       
EARNINGS PER SHARE (BASIC) ATTRIBUTABLE TO PARENT COMPANY STOCKHOLDERS 1.19 1.38  
EARNINGS PER SHARE (DILUTED) ATTRIBUTABLE TO PARENT COMPANY STOCKHOLDERS 1.14 1.32  
       
NUMBER OF WEIGHTED AVERAGE SHARES USED IN CALCULATING DILUTED EPS 942.9 944.2  
       


STMicroelectronics N.V.      
CONSOLIDATED STATEMENTS OF INCOME      
(in millions of U.S. dollars, except per share data ($))      
       
  Twelve months ended  
  December 31, December 31,  
  2023 2022  
  (Unaudited) (Audited)  
       
Net sales 17,239 16,083  
Other revenues 47 45  
NET REVENUES 17,286 16,128  
Cost of sales (8,999) (8,493)  
GROSS PROFIT 8,287 7,635  
Selling, general and administrative (1,631) (1,454)  
Research and development (2,100) (1,901)  
Other income and expenses, net 55 159  
Total operating expenses (3,676) (3,196)  
OPERATING INCOME 4,611 4,439  
Interest income, net 171 58  
Other components of pension benefit costs (19) (11)  
INCOME BEFORE INCOME TAXES AND NONCONTROLLING INTEREST 4,763 4,486  
Income tax expense (541) (520)  
NET INCOME 4,222 3,966  
Net income attributable to noncontrolling interest (11) (6)  
NET INCOME ATTRIBUTABLE TO PARENT COMPANY STOCKHOLDERS 4,211 3,960  
       
EARNINGS PER SHARE (BASIC) ATTRIBUTABLE TO PARENT COMPANY STOCKHOLDERS 4.66 4.37  
EARNINGS PER SHARE (DILUTED) ATTRIBUTABLE TO PARENT COMPANY STOCKHOLDERS 4.46 4.19  
       
NUMBER OF WEIGHTED AVERAGE SHARES USED IN CALCULATING DILUTED EPS 944.2 946.2  
       


       
STMicroelectronics N.V.      
CONSOLIDATED BALANCE SHEETS      
As at December 31, September 30, December 31,
In millions of U.S. dollars 2023 2023 2022
  (Unaudited) (Unaudited) (Audited)
ASSETS      
Current assets:      
Cash and cash equivalents 3,222 3,011 3,258
Short-term deposits 1,226 506 581
Marketable securities 1,635 1,537 679
Trade accounts receivable, net 1,731 1,837 1,970
Inventories 2,698 2,870 2,583
Other current assets 1,295 1,230 734
Total current assets 11,807 10,991 9,805
Goodwill 303 294 297
Other intangible assets, net 367 353 405
Property, plant and equipment, net 10,554 9,672 8,201
Non-current deferred tax assets 592 510 602
Long-term investments 22 21 11
Other non-current assets 808 721 661
  12,646 11,571 10,177
Total assets 24,453 22,562 19,982
       
LIABILITIES AND EQUITY      
Current liabilities:      
Short-term debt 217 173 175
Trade accounts payable 1,856 1,555 2,122
Other payables and accrued liabilities 1,525 1,517 1,385
Dividends payable to stockholders 54 115 60
Accrued income tax 78 377 95
Total current liabilities 3,730 3,737 3,837
Long-term debt 2,710 2,418 2,542
Post-employment benefit obligations 372 338 331
Long-term deferred tax liabilities 54 55 60
Other long-term liabilities 735 507 454
  3,871 3,318 3,387
Total liabilities 7,601 7,055 7,224
Commitment and contingencies      
Equity      
Parent company stockholders' equity      
Common stock (preferred stock: 540,000,000 shares authorized, not issued; common stock: Euro 1.04 nominal value, 1,200,000,000 shares authorized, 911,281,920 shares issued, 902,771,081 shares outstanding as of December 31, 2023) 1,157 1,157 1,157
Additional Paid-in Capital 2,866 2,800 2,631
Retained earnings 12,470 11,395 8,713
Accumulated other comprehensive income 613 376 460
Treasury stock (377) (293) (268)
Total parent company stockholders' equity 16,729 15,435 12,693
Noncontrolling interest 123 72 65
Total equity 16,852 15,507 12,758
Total liabilities and equity 24,453 22,562 19,982
       
       


       
STMicroelectronics N.V.      
       
SELECTED CASH FLOW DATA      
       
Cash Flow Data (in US$ millions) Q4 2023 Q3 2023 Q4 2022
       
Net Cash from operating activities 1,480 1,881 1,550
Net Cash used in investing activities (1,610) (1,756) (924)
Net Cash from (used in) financing activities 336 (223) (185)
Net Cash increase (decrease) 211 (100) 446
       
Selected Cash Flow Data (in US$ millions) Q4 2023 Q3 2023 Q4 2022
       
Depreciation & amortization 414 396 331
Net payment for Capital expenditures (798) (1,152) (920)
Dividends paid to stockholders (60) (58) (54)
Change in inventories, net 219 147 (125)
       

Appendix
ST
Supplemental Financial Information

  Q4 2023 Q3 2023 Q2 2023 Q1 2023 Q4 2022 FY 2023 FY 2022
Net Revenues By Market Channel (%)              
Total OEM 70% 67% 64% 64% 68% 66% 67%
Distribution 30% 33% 36% 36% 32% 34% 33%
               
€/$ Effective Rate 1.08 1.09 1.08 1.06 1.04 1.08 1.10
               
Product Group Data (US$ m)              
Automotive & Discrete Group (ADG)              
- Net Revenues 2,060 2,025 1,955 1,807 1,696 7,848 5,969
- Operating Income 657 638 624 577 470 2,497 1,469
Analog, MEMS & Sensors Group (AMS)              
- Net Revenues 993 990 940 1,068 1,339 3,991 4,911
- Operating Income 147 186 139 218 346 690 1,237
Microcontrollers & Digital ICs Group (MDG)              
- Net Revenues 1,225 1,412 1,427 1,368 1,383 5,431 5,228
- Operating Income 342 496 505 495 495 1,838 1,830
Others (a)              
- Net Revenues 4 4 4 4 6 16 20
- Operating Income (Loss) (123) (79) (122) (89) (24) (414) (97)
Total              
- Net Revenues 4,282 4,431 4,326 4,247 4,424 17,286 16,128
- Operating Income 1,023 1,241 1,146 1,201 1,287 4,611 4,439

(a)  Net revenues of Others include revenues from sales assembly services and other revenues. Operating income (loss) of Others includes items such as unused capacity charges, including reduced manufacturing activity due to COVID-19 and incidents leading to power outage, impairment, restructuring charges and other related closure costs, management reorganization costs, start-up and phase-out costs of certain manufacturing facilities, and other unallocated income (expenses) such as: strategic or special research and development programs, certain corporate-level operating expenses, patent claims and litigations, and other costs that are not allocated to product groups, as well as operating earnings of other products. Others includes:

(US$ m) Q4 2023 Q3 2023 Q2 2023 Q1 2023 Q4 2022 FY 2023 FY 2022
Unused capacity charges 57 46 15 1 - 120 22

(Appendix – continued)
ST
Supplemental Non-U.S. GAAP Financial Information
U. S. GAAP – Non-U.S. GAAP Reconciliation

The supplemental non-U.S. GAAP information presented in this press release is unaudited and subject to inherent limitations. Such non-U.S. GAAP information is not based on any comprehensive set of accounting rules or principles and should not be considered as a substitute for U.S. GAAP measurements. Also, our supplemental non-U.S. GAAP financial information may not be comparable to similarly titled non-U.S. GAAP measures used by other companies. Further, specific limitations for individual non-U.S. GAAP measures, and the reasons for presenting non-U.S. GAAP financial information, are set forth in the paragraphs below. To compensate for these limitations, the supplemental non-U.S. GAAP financial information should not be read in isolation, but only in conjunction with our consolidated financial statements prepared in accordance with U.S. GAAP.

ST believes that these non-U.S. GAAP financial measures provide useful information for investors and management because they offer, when read in conjunction with ST’s U.S. GAAP financials, (i) the ability to make more meaningful period-to-period comparisons of ST’s on-going operating results, (ii) the ability to better identify trends in ST’s business and perform related trend analysis, and (iii) to facilitate a comparison of ST’s results of operations against investor and analyst financial models and valuations, which may exclude these items.

Net Financial Position and Adjusted Net Financial Position (non-U.S. GAAP measures)

Net Financial Position, a non-U.S. GAAP measure, represents the difference between our total liquidity and our total financial debt. Our total liquidity includes cash and cash equivalents, restricted cash, if any, short-term deposits, and marketable securities, and our total financial debt includes short-term debt and long-term debt, as reported in our Consolidated Balance Sheets. Starting Q4 2023, ST also presents adjusted net financial position as a non-U.S. GAAP measure, to take into consideration the effect on total liquidity of advances received on capital grants for which capital expenditures have not been incurred yet. Prior periods are not impacted.

ST believes its Net Financial Position and Adjusted Net Financial Position provide useful information for investors and management because they give evidence of our global position either in terms of net indebtedness or net cash by measuring our capital resources based on cash and cash equivalents, restricted cash, if any, short-term deposits and marketable securities and the total level of our financial debt. Our definitions of Net Financial Position and Adjusted Net Financial Position may differ from definitions used by other companies, and therefore, comparability may be limited.

(US$ m) Dec 31 2023 Sep 30 2023 July 1 2023 Apr 1 2023 Dec 31 2022
Cash and cash equivalents 3,222 3,011 3,111 3,572 3,258
Short term deposits 1,226 506 106 106 581
Marketable securities 1,635 1,537 1,346 841 679
Total liquidity 6,083 5,054 4,563 4,519 4,518
Short-term debt (217) (173) (176) (176) (175)
Long-term debt (a) (2,710) (2,418) (2,473) (2,488) (2,542)
Total financial debt (2,927) (2,591) (2,649) (2,664) (2,717)
Net Financial Position 3,156 2,463 1,914 1,855 1,801
Advances from capital grants (152) - - - -
Adjusted Net Financial Position 3,004 2,463 1,914 1,855 1,801

(a)  Long-term debt contains standard conditions but does not impose minimum financial ratios. Committed credit facilities for $1.0 billion equivalent, are currently undrawn.

(Appendix – continued)
ST

Free Cash Flow (non-U.S. GAAP measure)

Free Cash Flow, which is a non-U.S. GAAP measure, is defined as (i) net cash from operating activities plus (ii) net cash used in investing activities, excluding payment for purchases of (and proceeds from matured) marketable securities and net investment in (and proceeds from) short-term deposits, which are considered as temporary financial investments. This definition ultimately results in net cash from operating activities plus payment for purchase (and proceeds from sale) of tangible, intangible and financial assets, proceeds from capital grants and other contributions, and net cash paid for business acquisitions, if any.

ST believes Free Cash Flow provides useful information for investors and management because it measures our capacity to generate cash from our operating and investing activities to sustain our operations. Free Cash Flow does not represent total cash flow since it does not include the cash flows from, or used in, financing activities.

Free Cash Flow reconciles with the total cash flow and the net cash increase (decrease) by including the payment for purchases of (and proceeds from matured) marketable securities and net investment in (and proceeds from) short-term deposits, the net cash from (used in) financing activities and the effect of changes in exchange rates. Our definition of Free Cash Flow may differ from definitions used by other companies.

(US$ m) Q4 2023 Q3 2023 Q2 2023 Q1 2023 Q4 2022 FY 2023 FY 2022
Net cash from operating activities 1,480 1,881 1,311 1,320 1,550 5,992 5,202
Payment for purchase of tangible assets, net of proceeds from sale and proceeds from capital grants and other contributions (798) (1,152) (1,072) (1,090) (920) (4,111) (3,524)
Payment for purchase of intangible assets, net of proceeds from sale (28) (22) (22) (24) (27) (97) (87)
Payment for purchase of financial assets, net of proceeds from sale (2) - (8) - - (10) -
Free Cash Flow (a) 652 707 209 206 603 1,774 1,591

(a) Free Cash Flow can also be expressed as net cash from operating and investing activities, excluding cash from (used in) marketable securities and short-term deposits.


1 Non-U.S. GAAP. See Appendix for reconciliation to U.S. GAAP and information explaining why ST believes these measures are important.

 

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