European chipmaker STMicroelectronics (STM, Financial) announced that following a dip in first-quarter performance, it anticipates a gradual recovery in sales for the second quarter. The first-quarter results aligned with the company's expectations and were considered the lowest point for the year. The company's stock surged by 4% in early trading, leading the French CAC 40 index.
STMicroelectronics, one of Europe's largest chip manufacturers, projects second-quarter revenue to reach $2.71 billion, a 16.2% year-over-year decline but above analysts' forecast of $2.62 billion. The company noted that this forecast does not account for potential future global tariff adjustments.
Jefferies analysts commented that the automotive and industrial chip sectors are beginning a cyclical recovery from a deep slump, expecting gradual improvement between late 2025 and 2026, regardless of the macroeconomic environment.
For the first quarter, STMicroelectronics reported revenue of $2.52 billion, consistent with its guidance and analyst expectations. The company's president and CEO, Jean-Marc Chery, emphasized a focus on innovation to enhance the competitiveness of their product and technology portfolio amid current uncertainties.
STMicroelectronics has not provided full-year guidance due to low visibility and ongoing customer inventory adjustments. Inventory days rose to 167 in the first quarter from 122 in the previous quarter.
