STMicro: one of biggest fallers in CAC40 in 2024

(CercleFinance.com) - Down 46% since the start of the year, STMicroelectronics has suffered one of the worst performances of 2024 amongst CAC40 stocks, against the backdrop of a deterioration in its outlook over the year.


STMicroelectronics has been confronted by disruptions to its supply chains, exacerbated by geopolitical tensions between the US and China, slowing both production and deliveries, Saxo Banque explains.

In addition, higher raw material and energy costs have squeezed profit margins, exacerbating difficulties in an already contracting market, the Danish bank continues.

The semiconductor manufacturer's share price plummeted by 13.7% on 25 July, in the wake of a sharply lower interim results, coupled with a reduction in its targets for 2024.

At the time STMicro said that it now only expects annual sales of $13.2bn to $13.7bn, with a gross margin of around 40%, compared with assumptions of $14bn-15bn - at the lower end of the 40% range - previously.

The Franco-Italian group disappointed the market once again at the end of October, when it indicated that it was aiming for sales of around $13.27bn in 2024, with a gross margin slightly below what had been indicated three months earlier.

The crisis is deeper and longer than expected, and STMicro is adapting by cutting costs, but this will take time, Oddo BHF reacted at the beginning of November, stating that it was adopting a much more cautious scenario for the group over 2025.


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