Benzinga | Jan 28, 2021 12:25PM EST

STM Beats On Q4 Earnings With Solid Revenue Growth, Guides For Strong Q1

* STMicroelectronics NV (NYSE: STM) reported year-on-year revenue growth of 17.5% to $3.24 billion in the fourth quarter of FY20 exceeding Street estimates by $0.1 billion.

* "Our engaged customer programs in Personal Electronics, as well as continuous acceleration in demand, especially of Automotive products and Microcontrollers, were the main factors that contributed to this result," said STMicroelectronics CEO Jean-Marc Chery.

* Net sales to OEMs and Distribution rose 19.8% and 11.4%, respectively.

* Gross profit rose by 16% to $1.25 billion with a margin contraction of 50 basis points (bps) to 38.8% due to price pressure and negative currency effects.

* Operating income increased by 42.7% to $657 million with a margin expansion of 360 bps to 20.3%.

* Analog, MEMS, and Sensors Group (AMS) operating income grew 42.9% to $402 million with a margin expansion of 240 bps to 28.3%.

* Microcontrollers and Digital ICs Group (MDG) operating income rose by 46.4% to $174 million with a margin expansion of 430 bps to 20.3%.

* Automotive and Discrete Group (ADG) operating income declined 16.4% to $94 million with a margin contraction of 230 bps to 9.9%.

* Net income posted a growth of 48% to $582 million.

* The EPS rose 47% to $0.63, beating consensus estimates by $0.07.

* Free cash flow rose by 11% to $512 million.

* The company expects a 31.2% revenue growth in the first quarter of FY21 to $2.93 billion.

* The gross margin expectation is higher by 60 bps at 38.5%.

* It intends to invest between $1.8 billion and $2 billion during FY21 towards Capex towards robust market demand and strategies.

* Previously the company had cut down on its FY20 Capex plans from $1.5 billion to between $1 billion and $1.2 billion.

* The company reappointed Chery as the CEO.

* Price action: STM shares were higher by 6.15% at $40.20 on the last check Thursday.