PARIS (Reuters) - STMicroelectronics (STM.PA) on Wednesday delivered an upbeat assessment on second-half demand for its smartphones-focused products, brushing off investor anxiety over the soft takeoff of Apple’s (AAPL.O) iPhone X.
The Franco-Italian chipmaker, whose customers range from carmakers to industrial groups and makers of new connected devices, said sales should grow in the first half, offsetting a seasonal smartphone dip in the first three months of the year.
STMicro’s shares were up by more than 4 percent at 0919 GMT, making the stock one of the top ten performers in the pan-European STOXX 600 index .
The Geneva-based group forecasts come as investor concerns about a potential stagnation of smartphone demand intensified after South Korean chipmaker SK Hynix Inc (000660.KS) Inc’s warned of a slower growth in smartphone chip sales on Tuesday.
Analysts estimate that Apple represents about 10 percent of STMicro’s revenues. The group makes imaging and proximity sensor products used in the iPhone X, according to analysts.
“We expect STMicro to benefit from a strong second-half due to continuing strength in the automotive and IoT (Internet of Things) segments, and the ramp of multiple new iPhone models with 3D sensing later in the year,” Liberum said in a note.
STMicro does not name its customers, but chief executive Carlo Bozotti said he expected “healthy demand” across all its products in the second-half, including smartphones.
The veteran STMicro boss, who is expected to make way for his deputy Jean-Marc Chery to take over in June, said demand from the automotive industry was particularly high.
“We see a strong demand on automotive everywhere,” he said during a call with analysts. “We don’t see any sign of accumulation of inventories. Just the opposite.”
First-quarter results were in line with market expectations.
The group’s quarterly net revenues rose 22 percent to $2.23 billion (1.6 billion pounds) from a year earlier but fell from the last quarter of 2017 due to a seasonal smartphone dip.
Gross margin rose to 39.9 percent from 37.7 percent.
The group sees first-half revenues to grow by 19.8 percent from the same period a year earlier.
Reporting by Mathieu Rosemain; Editing by Richard Lough, editing by Louise Havens