STMicroelectronics N.V. (STM) stock was climbing in the pre-market today following the announcement of Q2 2021 financial results. STM stock price saw a push of 5.34% to reach $41.43 a share at the time of this writing. The momentum was built already as the stock went high by 1.50% at the previous closing. Let’s deep dive to explore more of it.
STM stock’ Q2 Financial Results:
- STM stock recorded $2.99 billion in total revenue. This represents the 43.4 % year-over-year growth. All of its product groups sales have been increased over the year except the RF Communications sub-group.
- The gross profit of the STM stock reached $1.21 billion representing a 66% increase year over year. The increase is attributable to lower unloading charges, improved product mix, and manufacturing efficiencies.
- A gross margin of 40.5% showed an improvement of 550 basis points on yearly basis. The gross margin for the second quarter was 100 basis points higher than the stock’s midpoint guidance. This increase is mainly due to an improved product mix as well as favorable pricing.
- STM stock reported a $489 million operating income in the second quarter of 2021. This is 358.8% higher than the $106 million operating income in the same quarter of last year. Operating margin increased to 16.3% of net revenue representing a 1,120 increase in basis points over the year. The operating margin of STM stock was 5.1% in the second quarter of 2020.
- Net income increased to$412 million in Q2 2021 as compared to $90 million in the prior year quarter. Diluted earnings per share jumped from $0.10 in 2020 to $0.44 in 2021 second quarter.
- $438 million was recorded from capital expenditure payments and net proceeds from sales. In the prior year’s quarter, this amount was $312 million.
- At the end of the second quarter, STM stock’s inventory was $1.97 billion compared to $1.96 billion in Q2 2020.
Cash Dividend and Share Buyback:
STM stock paid $52 million in cash dividends to its shareholders along with the execution of a $156 million share buyback. Hence it completed the 750 million share repurchase program previously launched in 2018. STMicroelectronics announced the new share repurchase program of $1,040 million on July 01, 2021. This program will be completed within three years.
STM stock business Outlook:
For the third quarter which will end on October 2, 2021, STMicroelectronics projected its revenue to be $3.20 billion, 350 basis points plus or minus, which represents a 3% sequential increase. The gross margin is expected to be approximately 41%, 200 basis points above or below.
