STMicroelectronics N.V. (NYSE:STM) Q1 2019 Earnings Conference Call Transcript
Apr 24, 2019 • 03:30 am ET
Ladies and gentlemen, welcome to the First Quarter 2019 Earnings Release Conference Call and Live Webcast. I am Myra, the Chorus Call operator. I would like to remind you that all participants will be in listen-only mode, and the conference is being recorded. The presentation will be followed by a Q&A session. (Operator Instructions) The conference must not be recorded for publication or broadcast.
At this time, it's my pleasure to hand over to Celine Berthier, Group Vice President, Investor Relations. Please go ahead.
Thank you, Myra.
Good morning and thank you, everyone, for joining our first quarter 2019 financial results conference call.
Hosting the call today is Jean-Marc Chery, ST's President and Chief Executive Officer. Joining Jean-Marc on the call are Lorenzo Grandi, President of Finance, Infrastructure and Services and Chief Financial Officer; and Marco Cassis, President of Sales, Marketing, Communications & Strategy Development.
This live webcast and presentation materials can be accessed on ST's Investor Relations website. A replay will be available shortly after the conclusion of this call.
As usual, this call will include forward-looking statements that involve risk factors that could cause ST's results to differ materially from management's expectations and plans. We encourage you to review the safe harbor statements contained in the press release that was issued with the results this morning and also in ST's most recent regulatory filings for a full description of these risk factors. Also, to ensure all participants have an opportunity to ask questions during the Q&A session, please limit yourself to -- if possible, to one question and a brief follow-up.
I'd now like to turn the call over to Jean-Marc.
Thank you, Celine. Good morning, everybody, and thank you for joining ST on our first quarter 2019 earnings call.
Let me start with some opening remarks about Q1 results, Q2 guidance and full year 2019 expectations.
First on Q1, our revenues at $2.08 billion and our gross margin at 39.4% were substantially in line with our expectations amid softened market dynamics. We were lower than midpoint on revenues -- I will say more on that later -- and better on gross margin. We maintained a solid level of profitability, with an operating margin above 10% and a net income of $178 million.
Second, on Q2 -- so we are still operating under soft market conditions. But today we are confirming our plan to return to sequential growth in the second quarter. At the midpoint of our guidance, we see second quarter revenues up about 2.4% on a sequential basis, and we see gross margin at about 38.5% at the midpoint.
Regarding the full year 2019, our plan is for revenues to be in the range of about $9.45 billion to $9.85 billion. This means that we plan for strong sequential growth in the second half of the year across our industrial, automotive and personal electronics end markets. This expected level of growth is taking into account already engaged customer programs and new product introductions. It is also assuming