STMicroelectronics N.V. (NYSE:STM) Q1 2019 Earnings Conference Call Transcript

Apr 24, 2019 • 03:30 am ET

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STMicroelectronics N.V. (NYSE:STM) Q1 2019 Earnings Conference Call Transcript

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Q & A
Operator
Operator

We will now begin the question-and-answer session. (Operator Instructions) The first question is from Aleksander Peterc from Societe Generale. Please go ahead.

Analyst
Aleksander Peterc

Yes. Good morning and thanks for taking my question. Just regarding your reduced CapEx outlook and that compared to your revenue guidance for the full year. So it would appear that versus what you had thought at the beginning of the year, we're in the same ballpark, higher revenue broadly flat. And so I'd like to know in which market -- in which end market you've seen this reduction that leads you to moderate somewhat your CapEx expectations for the year.

Executive
Lorenzo Grandi

Good morning, everybody. I -- Lorenzo speaking. I'll take your question. Yes, you rightly say that in respect to the original expectation, we have some reduction. This reduction in term of revenues for the year has brought some moderate decline -- review of our capital. In which area? We see actually lower than expected the rebound, especially in the area of the microcontrollers. In the area of analog in which, let's say, we were expecting -- if you remember, at the beginning we were saying that we would see the Q1 as the worst quarter and then, let's say, restarting in Q2 some improvement in these products, while in Q2, still we see some difficulties in the area of microcontroller and analog.

So these bring us to believe that actually the overall (inaudible) for these two lines will be less brilliant than we were expecting at the beginning. On top of that, we have also seen in Q1 some weakening in the market of the traditional automotive. This is one of the reason, as we are shorter in revenues in respect to our guidance.

Analyst
Aleksander Peterc

Thanks. And just to confirm on automotive, can you give us the growth rates for all of your automotive end markets in the first quarter year-on-year?

Executive
Lorenzo Grandi

The growth of automotive in the first quarter, year-over-year, is about 10%, is in the range of 12%, 13% is -- so still a significant growth. The -- I would like to remind all of you that when I talk about automotive is not only the Group automotive, but all the sales that the Company does in automotive that is comprising of course also power with our silicon carbide, also microcontrollers, memories, all our products.

Analyst
Aleksander Peterc

Thank you.

Executive
Lorenzo Grandi

Welcome.

Operator
Operator

The next question is from Johannes Schaller from Deutsche Bank. Please go ahead.

Analyst
Johannes Schaller

Yeah. Hi, good morning. Thanks for taking my questions. In terms of the new design wins and then the ST Company-specific drivers for the second half, could you maybe give us a bit of an indication how much of the growth they will contribute in H2 and maybe, kind of make a bit of a kind of distinction between that and what you assume for the market? I think that would be quite helpful. And then also could you maybe give us an idea just on the underutilization charges in Q1 and what your plan for Q2