· Q4 net revenues $3.56 billion; gross margin 45.2%; operating margin 24.9%; net income $750 million
· FY net revenues $12.76 billion; gross margin 41.7%; operating margin 19.0%; net income $2.0 billion
· Business outlook at mid-point: Q1 net revenues of $3.50 billion and gross margin of 45.0%
Geneva, January 27, 2022 – STMicroelectronics (NYSE: STM), a global semiconductor leader serving customers across the spectrum of electronics applications, reported U.S. GAAP financial results for the fourth quarter ended December 31, 2021. This press release also contains non-U.S. GAAP measures (see Appendix for additional information).
ST reported fourth quarter net revenues of $3.56 billion, gross margin of 45.2%, operating margin of 24.9%, and net income of $750 million or $0.82 diluted earnings per share.
Jean-Marc Chery, STMicroelectronics President & CEO, commented:
· “As we announced on January 7, 2022, our Q421 net revenues and gross margin came in better than expected primarily due to better than anticipated operations in an ongoing dynamic market.
· “Q421 net revenues were 9.9% higher year-over-year, with a further increase in profitability: operating margin of 24.9% improved from 20.3% and net income was up 28.9%.
· “Full year 2021 net revenues increased 24.9% to $12.76 billion, reflecting a strong performance across all the end markets we address and our engaged customer programs throughout the year. Operating margin increased to 19.0% from 12.9% in FY20 and net income was up 80.8%.
· “ST’s first quarter outlook, at the mid-point, is for net revenues of $3.50 billion, increasing year-over-year by 16.1% and decreasing sequentially by 1.6%; gross margin is expected to be about 45.0%.
· “For 2022, we plan to invest about $3.4 billion to $3.6 billion in CAPEX to further increase our production capacity and to support our strategic initiatives including the first industrialization line of our new 300mm wafer fab in Agrate, Italy.
· “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 $15.3 billion.”
Quarterly Financial Summary (U.S. GAAP)
| (US$ m, except per share data) | Q4 2021 | Q3 2021 | Q4 2020 | Q/Q | Y/Y |
| Net Revenues | $3,556 | $3,197 | $3,235 | 11.2% | 9.9% |
| Gross Profit | $1,609 | $1,330 | $1,254 | 20.9% | 28.3% |
| Gross Margin | 45.2% | 41.6% | 38.8% | 360 bps | 640 bps |
| Operating Income | $885 | $605 | $657 | 46.2% | 34.8% |
| Operating Margin | 24.9% | 18.9% | 20.3% | 600 bps | 460 bps |
| Net Income | $750 | $474 | $582 | 58.1% | 28.9% |
| Diluted Earnings Per Share | $0.82 | $0.51 | $0.63 | 60.8% | 30.2% |
Annual Financial Summary (U.S. GAAP)
| (US$ m, except earnings per share data) | FY2021 | FY2020 | Y/Y |
| Net Revenues | $12,761 | $10,219 | 24.9% |
| Gross Profit | $5,326 | $3,789 | 40.6% |
| Gross Margin | 41.7% | 37.1% | 460 bps |
| Operating Income | $2,419 | $1,323 | 82.8% |
| Operating Margin | 19.0% | 12.9% | 610 bps |
| Net Income | $2,000 | $1,106 | 80.8% |
| Diluted Earnings Per Share | $2.16 | $1.20 | 80.0% |
Net revenues totaled $3.56 billion, representing a year-over-year increase of 9.9%. On a year-over-year basis, the Company recorded higher net sales in all product groups except the Imaging sub-group, as expected. Year-over-year net sales to OEMs were substantially unchanged in total while Distribution increased 38.7%. On a sequential basis, net revenues increased 11.2%, 140 basis points above the high-end of the Company’s guidance. ADG and MDG reported increases in net revenues on a sequential basis, with AMS essentially flat.
Gross profit totaled $1.61 billion, representing a year-over-year increase of 28.3%. Gross margin of 45.2% increased 640 basis points year-over-year, 20 basis points above the high-end of the Company’s guidance, principally driven by improved product mix, favorable pricing, and manufacturing efficiencies.
Operating income increased 34.8% to $885 million, compared to $657 million in the year-ago quarter. The Company’s operating margin increased 460 basis points on a year-over-year basis to 24.9% of net revenues, compared to 20.3% in the 2020 fourth quarter.
By product group, compared with the year-ago quarter:
Automotive and Discrete Group (ADG):
· Revenue increased in both Automotive and in Power Discrete.
· Operating profit increased by 129.5% to $216 million. Operating margin was 17.6% compared to 9.9%.
Analog, MEMS and Sensors Group (AMS):
· Revenue increased in both Analog and MEMS and decreased in Imaging.
· Operating profit decreased by 16.6% to $335 million. Operating margin was 26.6% compared to 28.3%.
Microcontrollers and Digital ICs Group (MDG):
· Revenue increased in both Microcontrollers and in RF Communications.
· Operating profit increased by 82.9% to $318 million. Operating margin was 29.9% compared to 20.3%.
Net income and diluted earnings per share increased to $750 million and $0.82, respectively, compared to $582 million and $0.63, respectively, in the year-ago quarter.
Cash Flow and Balance Sheet Highlights
| Trailing 12 Months | ||||||
| (US$ m) | Q4 2021 | Q3 2021 | Q4 2020 | Q4 2021 | Q4 2020 | TTM Change |
| Net cash from operating activities | 881 | 895 | 922 | 3,060 | 2,093 | 46.2% |
| Free cash flow (non-U.S. GAAP) | 314 | 420 | 512 | 1,120 | 627 | 78.6% |
Capital expenditure payments, net of proceeds from sales, were $548 million in the fourth quarter and $1.83 billion for the full year 2021. In the year-ago quarter, capital expenditures, net, were $381 million.
Inventory at the end of the fourth quarter was $1.97 billion, up from $1.84 billion in the year-ago quarter. Day sales of inventory at quarter-end was 91 days compared to 85 days in the year-ago quarter.
Free cash flow (non-U.S. GAAP) was $314 million in the fourth quarter, compared to $512 million in the year-ago quarter.
In the fourth quarter, the Company paid cash dividends to its stockholders totaling $60 million and executed a $86 million share buy-back as part of its share repurchase program launched on July 1, 2021.
ST’s net financial position (non-U.S. GAAP) was $977 million at December 31, 2021 compared to $798 million at October 2, 2021 and reflected total liquidity of $3.52 billion and total financial debt of $2.54 billion.
Business Outlook
The Company’s guidance, at the mid-point, for the 2022 first quarter is:
- Net revenues are expected to be $3.50 billion, a decrease of 1.6% sequentially, plus or minus 350 basis points;
- Gross margin of about 45.0%, plus or minus 200 basis points;
- This outlook is based on an assumed effective currency exchange rate of approximately $1.15 = €1.00 for the 2022 first quarter and includes the impact of existing hedging contracts.
- The first quarter will close on April 2, 2022.
Conference Call and Webcast Information
STMicroelectronics will conduct a conference call with analysts, investors and reporters to discuss its fourth quarter 2021 financial results and current business outlook today at 9:30 a.m. Central European Time (CET) / 3:30 a.m. U.S. Eastern Time (ET). A live webcast (listen-only mode) of the conference call will be accessible at ST’s website, http://investors.st.com, and will be available for replay until February 11, 2022.
Use of Supplemental Non-U.S. GAAP Financial Information
This press release contains supplemental non-U.S. GAAP financial information.
Readers are cautioned that these measures are unaudited and not prepared in accordance with U.S. GAAP and should not be considered as a substitute for U.S. GAAP financial measures. In addition, such non-U.S. GAAP financial measures may not be comparable to similarly titled information from other companies. To compensate for these limitations, the supplemental non-U.S. GAAP financial information should not be read in isolation, but only in conjunction with the Company’s consolidated financial statements prepared in accordance with U.S. GAAP.
See the Appendix of this press release for a reconciliation of the Company’s non-U.S. GAAP financial measures to their corresponding U.S. GAAP financial measures.
