STMicroelectronics says too early to guide for 2025 after gloomy Q1 view

By Nathan Vifflin and Leo Marchandon

(Reuters) -STMicroelectronics said it was too early to give a guidance for the full year 2025 after it warned on Thursday that sales would fall further in the first quarter, as the downturn seen in its key markets drags on into the new year.

Shares of STMicro, one of Europe's largest chipmakers, were down 6.8% at 22.18 euros by 1226 GMT, after touching their lowest price since June 2020 earlier in the session.

Chief executive Jean-Marc Chery said in a call with analysts that providing a guidance for a 2025 was difficult due to poor visibility and a persisting inventory correction among customers.

"We think its fair to consider Q1 as the low point of 2025," Chery added. Ahead of the call, analysts had said investors were nervous about when the bottom of the cycle would be reached.

STMicro, whose clients include Tesla and Apple, forecast first quarter revenue of $2.51 billion, implying a nearly 28% drop from a year earlier.

The company had already warned in November that its revenue would decline more than usual in the seasonally weak first quarter, but the guidance still missed analysts' expectations of $2.72 billion, LSEG's IBES data showed.

Its U.S.-based peer Texas Instruments, considered an industry bellwether, last week also forecast first quarter profit below market estimates, as it grapples with an inventory buildup in its key automotive and industrial markets.

STMicro said it was planning to cut a significant amount of production days across its fabs, assembly and test plants.

"We also have a plan for temporary closing of many of our fabs during this quarter. Our expectation is that in Q2, we will continue ... to have a significant amount in terms of unloading," finance chief Lorenzo Grandi told analysts.

STMicro also outlined its capital expenditure plans for 2025, with an aim to invest between $2 billion and $2.3 billion. That is down from $2.53 billion last year and $4 billion in 2023.

The Franco-Italian group reported fourth quarter net income of $341 million, ahead of analysts' forecast of $326 million, driven by higher revenues in personal electronics and despite lower revenues in industrial.

($1 = 0.9608 euros)

(Reporting by Nathan Vifflin and Leo Marchandon in Gdansk, additionnal reporting by Toby Sterling in Amsterdam; Editing by Milla Nissi)