STMicroelectronics 4Q Net Profit Rose; Plans to Invest in Chip-Production Capacity

By Mauro Orru

STMicroelectronics NV on Thursday posted higher net profit for the fourth quarter amid strong demand for semiconductors, and outlined plans to invest about $3.4 billion to $3.6 billion in capital expenditure this year to further increase production capacity.

The European chip maker said net profit climbed to $750 million from $582 million in the fourth quarter of 2020.

Net revenue for the period rose to $3.56 billion from $3.24 billion, as indicated by preliminary figures earlier in January.

Gross profit rose to $1.61 billion from $1.25 billion with a gross margin of 45.2%, while operating income rose to $885 million from $657 million with an operating margin of 24.9%.

STMicroelectronics had expected a fourth-quarter gross margin of about 43%, plus or minus 200 basis points. Chief Executive Jean-Marc Chery indicated in early January that the company ended the fourth quarter with revenue above its target and a gross margin at or slightly above the high end of the outlook range.

For the first quarter of this year, STMicroelectronics expects net revenue of $3.50 billion at the mid-point. It also targets a gross margin of about 45%, plus or minus 200 basis points.

"Based on our strong customer demand and increased capacity, we will drive the company based on a plan for FY22 revenues in the range of $14.8 billion to $15.3 billion," Mr. Chery said.

Write to Mauro Orru at [e-mail]; @MauroOrru94

(END) Dow Jones Newswires

January 27, 2022 01:37 ET (06:37 GMT)

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