STMicroelectronics Stock Falls Over Q3 Revenue Guidance Miss
European semiconductor firm STMicroelectronics (STM) experienced a sharp decline in its stock price after lowering its third-quarter revenue guidance to $3.7 billion from an expected $3.8 billion, triggering over a 20% drop within two trading sessions. Despite the selloff, STM's second-quarter results were strong: revenues rose by 26% year-over-year to $3.49 billion with improved gross margins and significant earnings growth of four times compared to last year. The MEMS business grew 26%, while microcontrollers surged by 34.5%. Free cash flow turned positive at $75 million, up from a negative $152 million in the prior-year period. The company remains optimistic about its data center segment's growth potential and is repositioning itself toward AI infrastructure and silicon photonics. While STM’s forward P/E ratio appears elevated compared to sector averages, other valuation metrics like price-to-sales remain competitive.
Tickers: $STM