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STM Gears Up to Report Q4 Earnings: What's in Store for the Stock?

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STMicroelectronics (STM - Free Report) is scheduled to report its fourth-quarter 2024 results on Jan. 30.

Find the latest earnings estimates and surprises on Zacks Earnings Calendar.

For the fourth quarter, the company expects net revenues of $3.32 billion at the midpoint. The Zacks Consensus Estimate for revenues is pegged at $3.32 billion, implying a 22.5% year-over-year decline.

The consensus mark for earnings has remained unchanged over the past 60 days at 35 cents per share, indicating a decline of 69.3% from the year-ago reported figure.

STM surpassed the Zacks Consensus Estimate in three of the trailing four quarters while missing the same once, the average surprise being 8.5%.

Let’s see how things have shaped up for this announcement.

STMicroelectronics N.V. Price and EPS Surprise

STMicroelectronics N.V. Price and EPS Surprise

STMicroelectronics N.V. price-eps-surprise | STMicroelectronics N.V. Quote

Key Factors to Consider for STM’s Q4 Results

STMicroelectronics’ fourth-quarter 2024 performance is likely to have benefited from the rising demand in the automotive product group across all geographies, driven by increasing semiconductor pervasion and structural transformation. Robust momentum in the automotive electrification market, driven by continued design wins with its latest generation of automotive microcontrollers, is likely to have been a tailwind for STM in the to-be-reported quarter.

Strength in embedded processing solutions, owing to its expanding STM32 portfolio, growing customer engagement for edge artificial intelligence (AI) deployment and AI algorithm integration into existing microcontroller unit offerings, is likely to have boosted STM’s performance in the quarter under review.

Rising momentum across the computer peripherals and communication equipment markets is expected to have been another positive.

Nevertheless, a significant downturn in the Industrial market due to shrinking demand for industrial goods and a rapid drop in inventory throughout the supply chain is likely to have hurt the fourth quarter’s top and bottom lines.

STMicroelectronics has earlier stated that it anticipates a delayed recovery in the Industrial end market and a lower-than-expected increase in Automotive end market revenues in the second half of the year versus the first half. Additionally, the growing macroeconomic challenges and unfavorable seasonality are likely to have remained headwinds for the company in the fourth quarter.

What Our Model Says About STM

Our proven model does not conclusively predict an earnings beat for STM this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. However, that’s not the case here.

STM currently carries a Zacks Rank #5 (Strong Sell) and it has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks With the Favorable Combination

Per our model, AMETEK (AME - Free Report) , PayPal (PYPL - Free Report) and ServiceNow (NOW - Free Report) have the right combination of elements to post an earnings beat in their upcoming releases.

ServiceNow has an Earnings ESP of +0.91% and sports a Zacks Rank #1 at present. The company is slated to report fourth-quarter 2024 results on Jan. 29. You can see the complete list of today’s Zacks #1 Rank stocks here.

AME has an Earnings ESP of +0.54% and carries a Zacks Rank #2 at present. The company is slated to report fourth-quarter 2024 results on Feb. 4.

PayPal has an Earnings ESP of +1.36% and a Zacks Rank #3 at present. The company is slated to report fourth-quarter fiscal 2025 results on Feb. 4.

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