PR No: C2855C
STMicroelectronics Reports Q2 2018 Financial
Results
- Q2 net revenues $2.27 billion (up 18.0% Y/Y), operating
margin 12.7%, net income $261 million
- Q2 Y/Y revenue performance balanced across product groups,
regions and end markets
- Q3 business outlook at mid-point: net revenues up about
10.0% Q/Q, gross margin about 40.0%
Geneva, July 25, 2018 - STMicroelectronics
(NYSE: STM), a global semiconductor leader serving customers
across the spectrum of electronics applications, reported U.S. GAAP
financial results for the second quarter ended June 30, 2018. In
addition, this press release contains non-U.S. GAAP measures (see
Appendix for additional information).
Second quarter net revenues and gross margin
were above the mid-point of the Company's outlook. ST
reported second quarter net revenues of $2.27 billion, gross margin
of 40.2%, operating margin of 12.7%, and net income of $261 million
or $0.29 diluted earnings per share.
Jean-Marc Chery, STMicroelectronics President
& CEO, made the following comments:
- "ST had another quarter of double-digit, year-over-year
revenue growth, with improved performance across key financial
metrics. We are on track with the goal set at our Capital Markets
Day to grow year-over-year 2018 revenues between about 14% to
17%.
- "Revenue increased 18% year-over-year on balanced growth
across all product groups, regions and end markets, with an
especially strong performance in Industrial.
- "Operating income and net income were up sharply
year-over-year, increasing respectively about 60% and 73%.
- "ST's third quarter outlook is for revenues to grow
sequentially about 10.0%, reflecting year-over-year growth of
16.8%, and gross margin to be about 40.0%. This is driven by
continued healthy demand in our end markets and, as anticipated, by
growth in smartphone applications."
Financial Summary (U.S. GAAP)(1)
($ in millions except earnings per share) |
Q2 2018 |
Q1 2018 |
Q2 2017 |
Y/Y |
Q/Q |
Net Revenues |
$2,269 |
$2,226 |
$1,923 |
18.0% |
1.9% |
Gross Margin |
40.2% |
39.9% |
38.3% |
190 bps |
30 bps |
Operating Income |
$289 |
$269 |
$181 |
59.7% |
7.4% |
Operating Margin |
12.7% |
12.1% |
9.4% |
330 bps |
60 bps |
Net Income |
$261 |
$239 |
$151 |
72.8% |
9.2% |
Diluted Earnings Per Share |
$0.29 |
$0.26 |
$0.17 |
70.6% |
11.5% |
(1) Certain amounts in the prior periods
have been adjusted to reflect the January 1, 2018 adoption of ASU
2017-07 related to the reclassification of certain pension
costs.
Second Quarter 2018 Summary Review
Effective January 1, 2018, the Subsystems
business unit was transferred from Others to Analog, MEMS and
Sensors Group (AMS). Prior periods have been restated
accordingly.
Net Revenues By Product Group (in US$ millions) |
Q2 2018 |
Q1 2018 |
Q2 2017 |
Y/Y |
Q/Q |
Automotive and Discrete Group (ADG) |
$870 |
$817 |
$755 |
15.2% |
6.5% |
Analog, MEMS and Sensors Group (AMS) |
613 |
655 |
553 |
10.7 |
(6.4) |
Microcontrollers and Digital ICs Group (MDG) |
782 |
750 |
612 |
27.8 |
4.3 |
Others |
4 |
4 |
3 |
24.1 |
5.9 |
Total Net Revenues |
$2,269 |
$2,226 |
$1,923 |
18.0% |
1.9% |
Net revenues increased 1.9% sequentially,
40 basis points better than the mid-point of the Company's
guidance. On a year-over-year basis, second quarter net revenues
increased 18.0% with all product groups delivering double-digit
revenue growth. Year-over-year sales to OEMs and Distribution were
up 9.8% and 33.4%, respectively.
Gross profit totaled $911 million,
representing a year-over-year increase of 23.6%. Gross
margin was 40.2%, 20 basis points better than the mid-point of
the Company's guidance, and increasing 190 basis points
year-over-year, largely driven by improved manufacturing efficiency
and reflecting a favorable mix shift toward higher value
products.
Operating income was $289 million,
compared to $181 million in the year-ago quarter, with all product
groups growing double-digit and delivering improved profitability.
The Company's operating margin increased 330 basis points to
12.7% of net revenues, compared to 9.4% in the 2017 second
quarter.
By product group, compared with the
year-ago quarter:
Automotive and Discrete Group (ADG):
- Revenue grew double-digits, in both Automotive and Power
Discrete.
- Operating profit increased by 28.8% to $84 million, mainly due
to higher revenue and associated gross profit. Operating margin
increased to 9.7% from 8.7%.
Analog, MEMS and Sensors Group (AMS):
- Revenue grew double-digits, in both Imaging and in Analog.
- Operating profit increased by 24.1% to $64 million, mainly due
to higher revenue and associated gross profit. Operating margin
increased to 10.5% from 9.4%.
Microcontrollers and Digital ICs Group
(MDG):
- Revenue grew double-digits, in both Microcontrollers and
Digital ICs.
- Operating profit increased by 121.6% to $159 million mainly due
to higher revenue and associated gross profit. Operating margin
increased to 20.3% from 11.7%.
Net income and diluted earnings per
share increased to $261 million and $0.29, respectively,
compared to $151 million and $0.17, respectively, in the year-ago
quarter.
Cash Flow and Balance Sheet Highlights
|
|
|
|
Trailing 12 Months |
US$ in millions |
Q2 2018 |
Q1 2018 |
Q2 2017 |
Q2 2018 |
Q2 2017 |
TTM Change |
Net cash from operating activities |
$360 |
$455 |
$369 |
$1,865 |
$1,368 |
36.3% |
Free cash flow (non-U.S. GAAP) |
$(40) |
$95 |
$52 |
$280 |
$351 |
(20.2)% |
Capital expenditure payments, net of proceeds
from sales, in the second quarter were $390 million, in line with
the Company's CAPEX guidance of $1.2-$1.3 billion for the 2018 full
year. In the year-ago quarter, capital expenditures were $307
million.
Inventory at the end of the quarter was $1.56
billion, up from $1.43 billion in the prior quarter, to support
demand expected in the third quarter. Day sales of inventory at
quarter-end was 103 days, up from 97 days in the prior quarter.
As a result, free cash flow(non-U.S. GAAP) was
negative $40 million and positive $56 million in the year-to-date
period.
In the second quarter of 2018, the Company paid
cash dividends totaling $54 million. A cash dividend of $0.24 per
common share payable in equal quarterly installments of $0.06 in
each of the second, third and fourth quarters of 2018 and first
quarter of 2019 was approved on May 31st at the 2018 Annual General
Meeting of Shareholders.
ST's net financial position (non-U.S. GAAP) was
$411 million at June 30, 2018 compared to $522 million at March 31,
2018 and reflected total financial resources of $2.13 billion and
total financial debt of $1.72 billion.
Business Outlook
The Company expects third quarter 2018 revenues
to increase about 10.0% Q/Q (16.8% Y/Y) at the mid-point of the
Company's guidance, driven by continued healthy demand in the
Automotive and Industrial end markets and, as anticipated, by
growth in smartphone applications.
The Company's guidance for the 2018 third
quarter is:
- Net revenue is expected to increase about 10.0% sequentially,
plus or minus 350 basis points;
- Gross margin of about 40.0%, plus or minus 200 basis
points;
- This outlook is based on an assumed effective currency exchange
rate of approximately $1.19 = €1.00 for the 2018 third quarter and
includes the impact of existing hedging contracts.
- The third quarter will close on September 29, 2018.
Conference Call and Webcast Information
STMicroelectronics will conduct a conference
call with analysts, investors and media to discuss its second
quarter 2018 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 August 10, 2018.
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.
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. 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.
Forward-looking Information
Some of the statements contained in this release
that are not historical facts are statements of future expectations
and other forward-looking statements (within the meaning of Section
27A of the Securities Act of 1933 or Section 21E of the Securities
Exchange Act of 1934, each as amended) that are based on
management's current views and assumptions, and are conditioned
upon and also involve known and unknown risks and uncertainties
that could cause actual results, performance, or events to differ
materially from those anticipated by such statements, due to, among
other factors:
- Uncertain macro-economic and industry trends, which may impact
end-market demand for our products;
- Customer demand that differs from projections;
- The ability to design, manufacture and sell innovative products
in a rapidly changing technological environment;
- Changes in economic, social, labor, political, or
infrastructure conditions in the locations where we, our customers,
or our suppliers operate, including as a result of macro-economic
or regional events, military conflicts, social unrest, labor
actions, or terrorist activities;
- The Brexit vote and the perceptions as to the impact of the
withdrawal of the U.K. may adversely affect business activity,
political stability and economic conditions in the U.K., the
Eurozone, the EU and elsewhere. While we do not have material
operations in the U.K. and have not experienced any material impact
from Brexit on our underlying business to date, we cannot predict
its future implications;
- Financial difficulties with any of our major distributors or
significant curtailment of purchases by key customers;
- The loading, product mix, and manufacturing performance of our
production facilities;
- The functionalities and performance of our IT systems, which
support our critical operational activities including
manufacturing, finance and sales, and any breaches of our IT
systems or those of our customers or suppliers;
- Variations in the foreign exchange markets and, more
particularly, the U.S. dollar exchange rate as compared to the Euro
and the other major currencies we use for our operations;
- The impact of intellectual property ("IP") claims by our
competitors or other third parties, and our ability to obtain
required licenses on reasonable terms and conditions;
- Changes in our overall tax position as a result of changes in
tax rules, new or revised legislation, the outcome of tax audits or
changes in international tax treaties which may impact our results
of operations as well as our ability to accurately estimate tax
credits, benefits, deductions and provisions and to realize
deferred tax assets;
- The outcome of ongoing litigation as well as the impact of any
new litigation to which we may become a defendant;
- Product liability or warranty claims, claims based on epidemic
or delivery failure, or other claims relating to our
products, or recalls by our customers for products containing
our parts;
- Natural events such as severe weather, earthquakes, tsunamis,
volcano eruptions or other acts of nature, health risks and
epidemics in locations where we, our customers or our suppliers
operate;
- Availability and costs of raw materials, utilities, third-party
manufacturing services and technology, or other supplies required
by our operations;
- Industry changes resulting from vertical and horizontal
consolidation among our suppliers, competitors, and customers;
- The ability to successfully ramp up new programs that could be
impacted by factors beyond our control, including the availability
of critical third party components and performance of
subcontractors in line with our expectations; and
- Theft, loss, or misuse of personal data about our employees,
customers, or other third parties, and breaches of global privacy
legislation, including the EU's General Data Protection Regulation
("GDPR").
Such forward-looking statements are subject to
various risks and uncertainties, which may cause actual results and
performance of our business to differ materially and adversely from
the forward-looking statements. Certain forward-looking statements
can be identified by the use of forward looking terminology, such
as "believes," "expects," "may," "are expected to," "should,"
"would be," "seeks" or "anticipates" or similar expressions or the
negative thereof or other variations thereof or comparable
terminology, or by discussions of strategy, plans or
intentions.
Some of these risk factors are set forth and are
discussed in more detail in "Item 3. Key Information - Risk
Factors" included in our Annual Report on Form 20-F for the year
ended December 31, 2017, as filed with the SEC on March 1, 2018.
Should one or more of these risks or uncertainties materialize, or
should underlying assumptions prove incorrect, actual results may
vary materially from those described in this release as
anticipated, believed, or expected. We do not intend, and do not
assume any obligation, to update any industry information or
forward-looking statements set forth in this release to reflect
subsequent events or circumstances.
About STMicroelectronics
ST is a global semiconductor leader delivering
intelligent and energy-efficient products and solutions that power
the electronics at the heart of everyday life. ST's products are
found everywhere today, and together with our customers, we are
enabling smarter driving and smarter factories, cities and homes,
along with the next generation of mobile and Internet of Things
devices.
By getting more from technology to get more from
life, ST stands for life.augmented.
In 2017, the Company's net revenues were $8.35
billion, serving more than 100,000 customers worldwide.
Further information can be found at
www.st.com.
For further information, please contact:
INVESTOR RELATIONS:Tait
Sorensen
Group VP, Investor Relations STMicroelectronics Tel: +1 602 485
2064 tait.sorensen@st.com
MEDIA RELATIONS:Alexis
Breton
Director, PR & Media OperationsSTMicroelectronics Tel: +
33 6 59 16 79 08 alexis.breton@st.com
STMicroelectronics N.V. |
|
|
CONSOLIDATED STATEMENTS OF INCOME |
|
|
(in millions of U.S. dollars, except per share data
($)) |
|
|
|
|
|
|
Three months ended |
|
June
30, |
July 1, |
|
2018 |
2017 |
|
(Unaudited) |
(Unaudited) |
|
|
|
Net
sales |
2,250 |
1,911 |
Other revenues |
19 |
12 |
NET REVENUES |
2,269 |
1,923 |
Cost
of sales |
(1,358) |
(1,186) |
GROSS PROFIT |
911 |
737 |
Selling, general and administrative |
(277) |
(239) |
Research and development |
(356) |
(326) |
Other income and expenses, net |
11 |
15 |
Impairment, restructuring charges and other related closure
costs |
- |
(6) |
Total operating expenses |
(622) |
(556) |
OPERATING INCOME |
289 |
181 |
Interest expense, net |
(2) |
(4) |
Other components of pension benefit costs |
(3) |
(3) |
Income (loss) on equity-method investments |
- |
(2) |
INCOME BEFORE INCOME TAXES AND NONCONTROLLING INTEREST |
284 |
172 |
Income tax expense |
(21) |
(19) |
NET INCOME |
263 |
153 |
Net
income attributable to noncontrolling interest |
(2) |
(2) |
NET INCOME ATTRIBUTABLE TO PARENT COMPANY |
261 |
151 |
|
|
|
EARNINGS PER SHARE (BASIC) ATTRIBUTABLE TO PARENT COMPANY
STOCKHOLDERS |
0.29 |
0.17 |
EARNINGS PER SHARE (DILUTED) ATTRIBUTABLE TO PARENT COMPANY
STOCKHOLDERS |
0.29 |
0.17 |
|
|
|
NUMBER OF WEIGHTED AVERAGE SHARES USED IN CALCULATING DILUTED
EARNINGS PER SHARE |
915.6 |
911.1 |
|
|
|
STMicroelectronics N.V. |
|
|
CONSOLIDATED STATEMENTS OF INCOME |
|
|
(in millions of U.S. dollars, except per share data
($)) |
|
|
|
|
|
|
Six months ended |
|
June
30, |
July 1, |
|
2018 |
2017 |
|
(Unaudited) |
(Unaudited) |
|
|
|
Net
sales |
4,463 |
3,728 |
Other revenues |
31 |
16 |
NET REVENUES |
4,494 |
3,744 |
Cost
of sales |
(2,695) |
(2,320) |
GROSS PROFIT |
1,799 |
1,424 |
Selling, general and administrative |
(542) |
(473) |
Research and development |
(705) |
(659) |
Other income and expenses, net |
26 |
32 |
Impairment, restructuring charges and other related closure
costs |
(20) |
(11) |
Total operating expenses |
(1,241) |
(1,111) |
OPERATING INCOME |
558 |
313 |
Interest expense, net |
(5) |
(9) |
Other components of pension benefit costs |
(5) |
(6) |
Income (loss) on equity-method investments |
- |
(2) |
INCOME BEFORE INCOME TAXES AND NONCONTROLLING INTEREST |
548 |
296 |
Income tax expense |
(44) |
(34) |
NET INCOME |
504 |
262 |
Net
income attributable to noncontrolling interest |
(4) |
(4) |
NET INCOME ATTRIBUTABLE TO PARENT COMPANY |
500 |
258 |
|
|
|
EARNINGS PER SHARE (BASIC) ATTRIBUTABLE TO PARENT COMPANY
STOCKHOLDERS |
0.56 |
0.29 |
EARNINGS PER SHARE (DILUTED) ATTRIBUTABLE TO PARENT COMPANY
STOCKHOLDERS |
0.55 |
0.28 |
|
|
|
NUMBER OF WEIGHTED AVERAGE SHARES USED IN CALCULATING DILUTED
EARNINGS PER SHARE |
915.1 |
906.5 |
|
|
|
STMicroelectronics N.V. |
|
|
|
CONSOLIDATED BALANCE SHEETS |
|
|
|
As at |
June
30, |
March
31, |
December 31, |
In millions of U.S. dollars |
2018 |
2018 |
2017 |
|
(Unaudited) |
(Unaudited) |
(Audited) |
ASSETS |
|
|
|
Current assets: |
|
|
|
Cash
and cash equivalents |
1,683 |
1,791 |
1,759 |
Short-term deposits |
15 |
14 |
- |
Marketable securities |
429 |
429 |
431 |
Trade accounts receivable, net |
1,106 |
1,042 |
1,149 |
Inventories |
1,559 |
1,435 |
1,335 |
Other current assets |
405 |
449 |
425 |
Total current assets |
5,197 |
5,160 |
5,099 |
Goodwill |
121 |
125 |
123 |
Other intangible assets, net |
198 |
205 |
209 |
Property, plant and equipment, net |
3,410 |
3,371 |
3,094 |
Non-current deferred tax assets |
674 |
632 |
624 |
Long-term investments |
58 |
58 |
57 |
Other non-current assets |
391 |
517 |
475 |
|
4,852 |
4,908 |
4,582 |
Total assets |
10,049 |
10,068 |
9,681 |
|
|
|
|
LIABILITIES AND EQUITY |
|
|
|
Current liabilities: |
|
|
|
Short-term debt |
118 |
119 |
118 |
Trade accounts payable |
991 |
979 |
893 |
Other payables and accrued liabilities |
887 |
940 |
897 |
Dividends payable to stockholders |
168 |
6 |
60 |
Accrued income tax |
40 |
41 |
52 |
Total current liabilities |
2,204 |
2,085 |
2,020 |
Long-term debt |
1,598 |
1,593 |
1,583 |
Post-employment benefit obligations |
374 |
393 |
385 |
Long-term deferred tax liabilities |
11 |
12 |
11 |
Other long-term liabilities |
208 |
216 |
215 |
|
2,191 |
2,214 |
2,194 |
Total liabilities |
4,395 |
4,299 |
4,214 |
Commitment and contingencies |
|
|
|
Equity |
|
|
|
Parent company stockholders' equity |
|
|
|
Common stock (preferred stock: 540,000,000 shares authorized, not
issued; common stock: Euro 1.04 nominal value, 1,200,000,000 shares
authorized, 911,141,920 shares issued, 901,354,389 shares
outstanding) |
1,157 |
1,157 |
1,157 |
Capital surplus |
2,766 |
2,743 |
2,718 |
Retained earnings |
1,215 |
1,212 |
973 |
Accumulated other comprehensive income |
538 |
724 |
688 |
Treasury stock |
(89) |
(132) |
(132) |
Total parent company stockholders' equity |
5,587 |
5,704 |
5,404 |
Noncontrolling interest |
67 |
65 |
63 |
Total equity |
5,654 |
5,769 |
5,467 |
Total liabilities and equity |
10,049 |
10,068 |
9,681 |
|
|
|
|
STMicroelectronics N.V. |
|
|
|
|
|
|
|
SELECTED CASH FLOW DATA |
|
|
|
|
|
|
|
Cash Flow Data (in US$ millions) |
Q2 2018 |
Q1 2018 |
Q2 2017 |
|
|
|
|
Net Cash from operating activities |
360 |
455 |
369 |
Net Cash used in investing activities |
(401) |
(374) |
(317) |
Net Cash used in financing activities |
(60) |
(54) |
(53) |
Net Cash increase (decrease) |
(108) |
32 |
13 |
|
|
|
|
Selected Cash Flow Data (in US$ millions) |
Q2 2018 |
Q1 2018 |
Q2 2017 |
|
|
|
|
Depreciation & amortization |
193 |
185 |
152 |
Net payment for Capital expenditures |
(390) |
(351) |
(307) |
Dividends paid to stockholders |
(54) |
(54) |
(48) |
Change in inventories, net |
(157) |
(84) |
(26) |
AppendixSTMicroelectronicsSupplemental Financial
Information
|
Q2 2018 |
Q1 2018 |
Q4 2017 |
Q3 2017 |
Q2 2017 |
Net Revenues By Market Channel(%) |
|
|
|
|
|
Total OEM |
61% |
63% |
68% |
66% |
66% |
Distribution |
39% |
37% |
32% |
34% |
34% |
|
|
|
|
|
|
€/$ Effective Rate |
1.19 |
1.18 |
1.15 |
1.13 |
1.09 |
|
|
|
|
|
|
Product Group Data (a) (US$ Million) |
|
|
|
|
|
Automotive & Discrete Group (ADG) |
|
|
|
|
|
- Net Revenues |
$870 |
$817 |
$821 |
$775 |
$755 |
- Operating Income |
$84 |
$90 |
$102 |
$85 |
$65 |
Analog, MEMS & Sensors Group (AMS) (b) |
|
|
|
|
|
- Net Revenues |
613 |
655 |
902 |
657 |
553 |
- Operating Income |
64 |
64 |
187 |
86 |
52 |
Microcontrollers & Digital ICs Group (MDG) |
|
|
|
|
|
- Net Revenues |
782 |
750 |
740 |
701 |
612 |
- Operating Income |
159 |
146 |
146 |
126 |
72 |
Others (c) |
|
|
|
|
|
- Net Revenues |
4 |
4 |
3 |
3 |
3 |
- Operating Income (Loss) |
(18) |
(31) |
(24) |
(16) |
(8) |
Total |
|
|
|
|
|
- Net Revenues |
$2,269 |
$2,226 |
$2,466 |
$2,136 |
$1,923 |
- Operating Income |
$289 |
$269 |
$411 |
$281 |
$181 |
(a) Certain amounts in the prior
periods have been adjusted to reflect the January 1, 2018 adoption
of ASU 2017-07 related to the reclassification of certain pension
costs. (b) Effective January 1, 2018, the Subsystems
business unit was transferred from Others to Analog, MEMS and
Sensors (AMS). Prior periods have been restated
accordingly.(c) Net revenues of Others includes
revenues from sales assembly services and other revenue. Operating
income (loss) of Others includes items such as unused capacity
charges, impairment, restructuring charges and other related
closure costs, management reorganization costs, phase out and
start-up costs, and other unallocated expenses such as: strategic
or special research and development programs, certain
corporate-level operating expenses, patent claims and litigations,
and other costs that are not allocated to product groups, as well
as operating earnings of other products. Others includes:
(US$ Million) |
Q2 2018 |
Q1 2018 |
Q4 2017 |
Q3 2017 |
Q2 2017 |
Unused Capacity Charges |
- |
1 |
1 |
1 |
1 |
Impairment & Restructuring Charges |
- |
21 |
20 |
14 |
6 |
(Appendix - continued)
STMicroelectronicsSupplemental Non-U.S.
GAAP Financial InformationU. S. GAAP - Non-U.S. GAAP
Reconciliation
The supplemental non-U.S. GAAP information
presented in this press release is unaudited and subject to
inherent limitations. Such non-U.S. GAAP information is not based
on any comprehensive set of accounting rules or principles and
should not be considered as a substitute for U.S. GAAP
measurements. Also, our supplemental non-U.S. GAAP financial
information may not be comparable to similarly titled non-U.S. GAAP
measures used by other companies. Further, specific limitations for
individual non-U.S. GAAP measures, and the reasons for presenting
non-U.S. GAAP financial information, are set forth in the
paragraphs below. To compensate for these limitations, the
supplemental non-U.S. GAAP financial information should not be read
in isolation, but only in conjunction with our consolidated
financial statements prepared in accordance with U.S. GAAP.
Operating income (loss) before impairment and
restructuring charges and one-time items is used by management to
help enhance an understanding of ongoing operations and to
communicate the impact of the excluded items, such as impairment,
restructuring charges and other related closure costs. Adjusted net
earnings and earnings per share (EPS) are used by management to
help enhance an understanding of ongoing operations and to
communicate the impact of the excluded items like impairment,
restructuring charges and other related closure costs attributable
to ST and other one-time items, net of the relevant tax impact.
The Company believes that these non-U.S. GAAP
financial measures provide useful information for investors and
management because they measure the Company's capacity to generate
profits from its business operations, excluding the effect of
acquisitions and expenses related to the rationalizing of its
activities and sites that it does not consider to be part of its
on-going operating results, thereby offering, when read in
conjunction with the Company's U.S. GAAP financials, (i) the
ability to make more meaningful period-to-period comparisons of the
Company's on-going operating results, (ii) the ability to
better identify trends in the Company's business and perform
related trend analysis, and (iii) an easier way to compare the
Company's results of operations against investor and analyst
financial models and valuations, which usually exclude these
items.
(US$ Million, except earnings per share in $) |
Q2 2018 |
Q1 2018 |
Q4 2017 |
Q3 2017 |
Q2 2017 |
U.S. GAAP Net Earnings |
261 |
239 |
308 |
236 |
151 |
U.S. GAAP Earnings Per Share |
0.29 |
0.26 |
0.34 |
0.26 |
0.17 |
Impairment & Restructuring |
- |
21 |
20 |
14 |
6 |
Estimated Income Tax Effect |
- |
(3) |
(1) |
(1) |
(1) |
Non-U.S. GAAP Net Earnings |
261 |
257 |
327 |
249 |
156 |
Non-U.S. GAAP Earnings Per Share |
0.29 |
0.28 |
0.36 |
0.28 |
0.17 |
(Appendix - continued)
Net financial position (non-U.S. GAAP
measure): resources (debt), represents the balance between our
total financial resources and our total financial debt. Our total
financial resources include cash and cash equivalents, marketable
securities, short-term deposits and restricted cash, and our total
financial debt includes short-term borrowings, current portion of
long-term debt and long-term debt, all as reported in our
consolidated balance sheet. We believe our net financial position
provides useful information for investors and management because it
gives evidence of our global position either in terms of net
indebtedness or net cash position by measuring our capital
resources based on cash, cash equivalents and marketable securities
and the total level of our financial indebtedness.
(US$ Million) |
Jun 30 2018 |
Mar 31 2018 |
Dec 31 2017 |
Sep 30 2017 |
Jul 1 2017 |
Cash and cash equivalents |
1,683 |
1,791 |
1,759 |
2,188 |
1,654 |
Short term deposits |
15 |
14 |
- |
- |
- |
Marketable securities |
429 |
429 |
431 |
433 |
335 |
Total financial resources |
2,127 |
2,234 |
2,190 |
2,621 |
1,989 |
Short-term debt |
(118) |
(119) |
(118) |
(486) |
(117) |
Long-term debt |
(1,598) |
(1,593) |
(1,583) |
(1,689) |
(1,348) |
Total financial debt |
(1,716) |
(1,712) |
(1,701) |
(2,175) |
(1,465) |
Net financial position |
411 |
522 |
489 |
446 |
524 |
Free cash flow (non-U.S. GAAP measure) is
defined as net cash from operating activities minus net cash from
(used in) investing activities, excluding payment for purchases
(proceeds from the sale of) marketable securities, short-term
deposits and restricted cash. We believe free cash flow provides
useful information for investors and management because it measures
our capacity to generate cash from our operating and investing
activities to sustain our operating activities. Free cash flow does
not represent total cash flow since it does not include the cash
flows generated by or used in financing activities. In addition,
our definition of free cash flow may differ from definitions used
by other companies.
(US$ Million) |
Q2 2018 |
Q1 2018 |
Q4 2017 |
Q3 2017 |
Q2 2017 |
Net cash from operating activities |
360 |
455 |
587 |
463 |
369 |
Net cash used in investing activities |
(401) |
(374) |
(442) |
(482) |
(317) |
Payment for purchase and proceeds from sale of marketable
securities, investment in short-term deposits, restricted cash |
1 |
14 |
- |
99 |
- |
Free cash flow |
(40) |
95 |
145 |
80 |
52 |
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