STMicroelectronics forecast higher fourth-quarter revenue after reporting a stronger-than-expected recovery in third-quarter sales and margins. The chipmaker pointed to improving demand and growth in artificial intelligence infrastructure.
STMicroelectronics forecast higher fourth-quarter revenue on Thursday, supported by improving demand and growth in AI infrastructure. The announcement followed a third quarter in which sales and margins recovered more than expected.
Third-quarter sales beat the guidance midpoint
The Franco-Italian chipmaker reported third-quarter revenue of $3.76 billion, up 17.9% from a year earlier and above its guidance midpoint of $3.70 billion. Operating income excluding restructuring and other special items rose 98% to $429 million.
Gross margin also improved. It increased to 37.3% from 33.2% a year earlier, helped by lower unused-capacity charges and a better product mix.
Fourth-quarter outlook points to further growth
For the fourth quarter, STMicro forecast revenue of $4.15 billion at the midpoint. That represents sequential growth of 10.5% and a 24.7% increase from a year earlier. The company expects a gross margin of 39.0%.
The company projected full-year 2026 revenue of about $14.5 billion, up 22.8% from 2025. It cited a cyclical recovery across its end markets and growth opportunities in AI data centres and low-Earth-orbit satellite communications.
Chief Executive Jean-Marc Chery said stronger bookings and improving demand visibility supported the recovery, while distribution inventories remained below the company's standard target. STMicro said it would continue expanding capacity while restructuring its manufacturing footprint and reducing its global cost base to improve profitability.
Source: Investing.com
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