STMicroelectronics N.V. (STM) Q3 2022 Earnings Call Transcript

STMicroelectronics N.V. (NYSE:STM) Q3 2022 Earnings Conference Call October 27, 2022 3:30 AM ET

Company Participants

Celine Berthier - Group Vice President and Head, Investor Relations

Jean-Marc Chery - President and Chief Executive Officer

Lorenzo Grandi - Chief Financial Officer

Marco Cassis - President, Analog, MEMS and Sensor Group and Head, STMicroelectronics Strategy, System Research and Application and Innovation Office

Conference Call Participants

Jerome Ramel - BNP Paribas Exane

Matt Ramsay - Cowen & Co

Stephane Houri - ODDO BHF

Johannes Schaller - Deutsche Bank

Janardan Menon - Jefferies

Adithya Metuku - Credit Suisse

Andrew Gardiner - Citi

Operator

Ladies and gentlemen, welcome to the STMicroelectronics Q3 2022 Earnings Results Conference Call and Live Webcast. I am Moira, the Chorus Call operator. [Operator Instructions] At this time, it’s my pleasure to hand over to Celine Berthier, Group Vice President, Head of Investor Relations. Please go ahead, madam.

Celine Berthier

Thank you, Moira. Good morning. Thank you everyone for joining our third quarter financial results conference call. Hosting the call today is Jean-Marc Chery, ST’s President and Chief Executive Officer. Joining Jean-Marc on the call today are Lorenzo Grandi, our President of Finance, Purchasing, ARM and Resilience and our Chief Financial Officer; and Marco Cassis, our President of Analog, MEMS and Sensor Group and also Head of STMicroelectronics Strategy, System Research and Application and Innovation Office.

This live webcast and presentation materials can be accessed on ST’s Investor Relations website. A replay will be available shortly after the provision of this call. This call will include forward-looking statements that involve risk factors that could cause ST’s results to differ materially from management’s expectations and plans. We encourage you to review the Safe Harbor statement contained in the press release that was issued with the results this morning and also in ST most recent regulatory filings for a full description of these risk factors. Also to ensure all participants have an opportunity to ask questions during the Q&A session, please limit yourself to one question and a brief follow-up.

I’d now like to turn the call over to Jean-Marc, ST’s President and CEO.

Jean-Marc Chery

Thank you, Celine. Good morning, everyone and thank you for joining ST for our Q3 2022 earnings conference call. So, let me begin with some opening comments.

So, starting with Q3, Q3 net revenues of $4.32 billion and gross margin of 47.6% came in above the midpoint of our business outlook range driven by continued strong demand for our product portfolio. Year-over-year, net revenues grew 35.2%, this revenue growth was accompanied by improved profitability, gross margin at 47.6%, up from 41.6%, operating margin at 29.4%, up from 18.9% and net income more than doubling at $1.1 billion. On a sequential basis, net revenues increased 12.6%. For the 9-month period, net revenues increased 27.2% to $11.7 billion, driven by growth in whole product groups and subgroups. We reported a gross margin of 47.3%, operating margin of 26.9% and net income of $2.71 billion.