STMicroelectronics reports Q1 earnings above expectations (updated)

STMicroelectronics NV

23/04/2026 06:17

Updates shares in paragraph 2, adds comments on demand in paragraphs 5-6 and 9, energy costs in paragraph 10

Automotive and industrial chip demand shows recovery

AI and data centre business set to drive future growth

Jefferies analysts see market upturn ahead

Risk from rising energy costs is limited, CFO Grandi says

By Nathan Vifflin

April 23 (Reuters) - STMicroelectronics STMPA.PA reported first-quarter results above market expectations on Thursday, pointing to signs of recovery in its key semiconductor markets, and forecast further growth in the second quarter.

Shares of the Franco-Italian group, one of Europe's largest semiconductor manufacturers and a bellwether for the automotive and industrial chip sectors, rose up to 10% in early trading, before paring gains to be about 7.5% higher by 0927 GMT.

The chipmaker reported revenue of $3.10 billion for the first three months of 2026, versus the $3.04 billion expected by analysts polled by LSEG. Operating income was $171 million, beating expectations of $165.8 million.

STMicro has been navigating a prolonged downturn in automotive and industrial semiconductors after customers spent recent years digesting excess post-pandemic inventory and cutting orders.

But company executives said demand for automotive chips returned to year-on-year growth in the quarter, while industrial demand also improved.

"We had a strong booking momentum during Q1, with book-to-bill well above one across all end markets and regions," CEO Jean-Marc Chery said during an earnings call.

The company forecast second-quarter revenue of $3.45 billion, which was also above market expectations of $3.21 billion.

Jefferies said in a note to investors that the revenue upside appeared to come from continued strength at Apple AAPL.O, data centres, low Earth orbit satellite-related systems and the recent acquisition of NXP's NXPI.O sensor business.

STMicro's artificial intelligence-related business is becoming a more meaningful growth driver, the company said. It expects data centre revenue to be well above $500 million in 2026 and to exceed $1 billion in 2027.

Rising energy costs are not expected to materially impact the company for now, as it is partly shielded through long-term supply agreements expiring at the end of this and next year, finance chief Lorenzo Grandi said.

STMicro is likely at the early stages of a market upturn, Jefferies analysts wrote, foreseeing further upgrades to estimates in future quarters.

(Reporting by Nathan Vifflin in Gdansk; Editing by Matt Scuffham and Milla Nissi-Prussak)

((nathan.vifflin@thomsonreuters.com; +48 58 769 67 13;))