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STMicroelectronics Q1 Earnings Miss Estimates, Revenues Rise Y/Y
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Key Takeaways
STM Q1 EPS rose 85.7% YoY but missed estimates, while revenues grew 23% and beat consensus.
STM saw strong demand in AI data center, communications and industrial, boosting multiple segments.
STM flagged margin pressure from acquisition costs but guides Q2 revenue growth and higher margins.
STMicroelectronics (STM - Free Report) posted first-quarter 2026 non-GAAP earnings of 13 cents per share, which increased 85.7% year over year but missed the Zacks Consensus Estimate by 31.6%.
STM’s earnings surpassed the Zacks Consensus Estimate in one of the trailing four quarters, while missing thrice, with an average negative surprise of 24.8%.
STM’s first-quarter 2026 revenues rose 23% from the year-ago period to $3.10 billion and beat the consensus mark by 1.3%.
The quarter benefited from stronger-than-expected demand in Communications Equipment and Computer Peripherals, where management highlighted AI data center programs as a key tailwind.
STMicroelectronics N.V. Price, Consensus and EPS Surprise
Communications Equipment and Computer Peripherals was the clear standout, with revenues up 41% year over year and modestly higher sequentially, supported by power conversion wins for AI servers, a ramp in silicon photonics and expanding engagements with hyperscalers.
Industrial revenues increased 26% from the year-ago quarter, with the company pointing to improving demand, strong bookings and normalized inventory in distribution.
Automotive grew 15% year over year, while Personal Electronics advanced 21% on higher content even as seasonality weighed on sequential results.
Analog products, MEMS and Sensors revenues increased 23.2%, and Embedded Processing advanced 31.3%, both benefiting from stronger demand in imaging, MEMS and general-purpose microcontrollers.
Power and Discrete products revenues slipped 1.8% and remained a profitability drag, while RF and Optical Communications revenues climbed 33.9% on strength tied to AI-related connectivity.
The company also announced an expanded strategic collaboration with Amazon Web Services to support new cloud and AI compute infrastructure, alongside a broader 800-volt DC power conversion portfolio developed with NVIDIA.
STMicroelectronics Profitability
Non-GAAP gross margin was 34.1%, while the company noted that Purchase Price Allocation effects related to the NXP MEMS sensor business acquisition weighed on reported profitability.
Non-GAAP operating margin improved to 5.5%, reflecting better utilization and product mix.
STM Cash Flow Reflects Acquisition Payment and Inventory Build
As of March 28, 2026, the cash and short-term investment balance was $1.89 billion, down from $2.83 billion as of Dec. 31, 2025, with total financial debt of $2.57 billion.
Cash generation was pressured by the acquisition of NXP’s MEMS sensor business. Non-GAAP free cash flow was negative $723 million in the quarter, including an $895 million cash outflow related to the deal.
Net cash from operating activities totaled $534 million, and dividends paid to stockholders were $71 million.
STMicroelectronics Outlook Calls for Q2 Growth and Margin Lift
For the second quarter of 2026, the company’s mid-point outlook calls for net revenues of $3.45 billion, implying 11.6% sequential growth and 24.9% year-over-year expansion.
STM expects non-GAAP gross margin around 35.2%. Non-GAAP net operating expenses are projected between $950 million and $960 million.
Shares of Arista Networks have gained 17.8% year to date. The Zacks Consensus Estimate for ANET’s 2026 earnings is pegged at $3.53 per share, up by a penny over the past 30 days, indicating an increase of 18.5% year over year.
Shares of Advanced Energy have rallied 78.8% year to date. The Zacks Consensus Estimate for AEIS’ 2026 earnings is pegged at $8.32 per share, down a penny over the past 60 days, indicating an increase of 29.8% year over year.
Applied Materials shares have surged 53.4% year to date. The Zacks Consensus Estimate for AMAT’s fiscal 2026 earnings is pegged at $11.10 per share, up 7 cents over the past 30 days, indicating an increase of 17.8% year over year.
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STMicroelectronics Q1 Earnings Miss Estimates, Revenues Rise Y/Y
Key Takeaways
STMicroelectronics (STM - Free Report) posted first-quarter 2026 non-GAAP earnings of 13 cents per share, which increased 85.7% year over year but missed the Zacks Consensus Estimate by 31.6%.
STM’s earnings surpassed the Zacks Consensus Estimate in one of the trailing four quarters, while missing thrice, with an average negative surprise of 24.8%.
STM’s first-quarter 2026 revenues rose 23% from the year-ago period to $3.10 billion and beat the consensus mark by 1.3%.
The quarter benefited from stronger-than-expected demand in Communications Equipment and Computer Peripherals, where management highlighted AI data center programs as a key tailwind.
STMicroelectronics N.V. Price, Consensus and EPS Surprise
STMicroelectronics N.V. price-consensus-eps-surprise-chart | STMicroelectronics N.V. Quote
STM’s Quarter in Detail
Communications Equipment and Computer Peripherals was the clear standout, with revenues up 41% year over year and modestly higher sequentially, supported by power conversion wins for AI servers, a ramp in silicon photonics and expanding engagements with hyperscalers.
Industrial revenues increased 26% from the year-ago quarter, with the company pointing to improving demand, strong bookings and normalized inventory in distribution.
Automotive grew 15% year over year, while Personal Electronics advanced 21% on higher content even as seasonality weighed on sequential results.
Analog products, MEMS and Sensors revenues increased 23.2%, and Embedded Processing advanced 31.3%, both benefiting from stronger demand in imaging, MEMS and general-purpose microcontrollers.
Power and Discrete products revenues slipped 1.8% and remained a profitability drag, while RF and Optical Communications revenues climbed 33.9% on strength tied to AI-related connectivity.
The company also announced an expanded strategic collaboration with Amazon Web Services to support new cloud and AI compute infrastructure, alongside a broader 800-volt DC power conversion portfolio developed with NVIDIA.
STMicroelectronics Profitability
Non-GAAP gross margin was 34.1%, while the company noted that Purchase Price Allocation effects related to the NXP MEMS sensor business acquisition weighed on reported profitability.
Non-GAAP operating margin improved to 5.5%, reflecting better utilization and product mix.
STM Cash Flow Reflects Acquisition Payment and Inventory Build
As of March 28, 2026, the cash and short-term investment balance was $1.89 billion, down from $2.83 billion as of Dec. 31, 2025, with total financial debt of $2.57 billion.
Cash generation was pressured by the acquisition of NXP’s MEMS sensor business. Non-GAAP free cash flow was negative $723 million in the quarter, including an $895 million cash outflow related to the deal.
Net cash from operating activities totaled $534 million, and dividends paid to stockholders were $71 million.
STMicroelectronics Outlook Calls for Q2 Growth and Margin Lift
For the second quarter of 2026, the company’s mid-point outlook calls for net revenues of $3.45 billion, implying 11.6% sequential growth and 24.9% year-over-year expansion.
STM expects non-GAAP gross margin around 35.2%. Non-GAAP net operating expenses are projected between $950 million and $960 million.
Zacks Rank and Other Stocks to Consider
Currently, STM carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the broader Zacks Computer and Technology sector are Arista Networks (ADI - Free Report) , Advanced Energy (AEIS - Free Report) and Applied Materials (AMAT - Free Report) , each carrying a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Shares of Arista Networks have gained 17.8% year to date. The Zacks Consensus Estimate for ANET’s 2026 earnings is pegged at $3.53 per share, up by a penny over the past 30 days, indicating an increase of 18.5% year over year.
Shares of Advanced Energy have rallied 78.8% year to date. The Zacks Consensus Estimate for AEIS’ 2026 earnings is pegged at $8.32 per share, down a penny over the past 60 days, indicating an increase of 29.8% year over year.
Applied Materials shares have surged 53.4% year to date. The Zacks Consensus Estimate for AMAT’s fiscal 2026 earnings is pegged at $11.10 per share, up 7 cents over the past 30 days, indicating an increase of 17.8% year over year.