STMicroelectronics (STM) Earnings Date & Reports

Key Takeaways

• STMicroelectronics reported third quarter 2026 net revenues of $3.76 billion, up 17.9% year over year and above the mid-point of its guidance range.
• Diluted earnings per share (EPS) came in at $0.31 on a U.S. GAAP basis, or $0.37 on a non-U.S. GAAP basis, slightly below analyst consensus estimates.
• Gross margin reached 37.3%, above the mid-point of the company's outlook, supported by better product mix and lower unused capacity charges.
• Fourth quarter 2026 guidance calls for net revenues of $4.15 billion and gross margin of about 39.0%, implying roughly 24.7% year-over-year growth.
• Management pointed to AI (artificial intelligence) datacenter and low-earth-orbit satellite communications as key growth drivers, with 2026 AI datacenter revenue expected near $1.3 billion.
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Earnings Context and Why It Matters

STMicroelectronics' third quarter 2026 report is a key checkpoint for investors tracking the semiconductor industry's cyclical recovery. After a prolonged inventory correction across industrial and automotive markets, the company is now showing clear signs of renewed demand, supported by strong bookings and improving visibility. The results also highlight ST's strategic push into AI datacenters and satellite communications, which are emerging as important long-term growth engines beyond its traditional automotive and industrial base. With management guiding toward a fourth-quarter revenue acceleration and full-year 2026 revenue growth of roughly 22.8%, this report offers a meaningful read on whether the company's margin recovery and reshaped manufacturing footprint are translating into durable profitability improvements.

Reported Results

For the third quarter ended September 26, 2026, STMicroelectronics reported net revenues of $3.76 billion, a 17.9% increase from the year-ago quarter and slightly above analyst expectations. The company posted U.S. GAAP gross margin of 37.3%, operating income of $367 million, and net income of $291 million, or $0.31 diluted earnings per share.

On a non-U.S. GAAP basis, which excludes impairment, restructuring, and phase-out charges, operating income was $429 million and net income was $344 million, or $0.37 diluted EPS. While revenue exceeded consensus, the non-U.S. GAAP EPS figure came in modestly below analyst estimates. The company generated positive free cash flow of $351 million, up from $130 million a year earlier.

For the fourth quarter of 2026, management guided to net revenues of $4.15 billion at the mid-point, implying about 10.5% sequential growth and roughly 24.7% year-over-year growth, with gross margin expected near 39.0%. This outlook translates to full-year 2026 revenues of approximately $14.5 billion.

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Market Reaction and Investor Sentiment

Heading into the report, investor sentiment around STMicroelectronics was shaped by expectations of an accelerating semiconductor recovery and growing AI datacenter exposure. The revenue beat and above-midpoint gross margin were seen as confirmation that demand is strengthening across key end markets, while the modest non-GAAP EPS miss reflected restructuring-related costs tied to the company's ongoing manufacturing footprint overhaul. Post-earnings attention centered on the fourth-quarter outlook, which implies a meaningful step-up in revenue, and on management's confidence in AI datacenter and satellite communications momentum. The combination of sequential growth, improving gross margin, and positive free cash flow generally supported a constructive read on the company's recovery trajectory.

Forward Outlook and Key Factors to Monitor

Management's fourth quarter 2026 guidance points to continued revenue acceleration, supported by strong bookings and a book-to-bill ratio that remains well above one across end markets. Investors will want to watch whether this momentum persists into 2027, particularly in AI datacenters, where ST expects 2026 revenue of about $1.3 billion and has signaled ambitions well above $2 billion for 2027.

On the margin front, the company's intermediate financial model targets a gross margin of 44% to 46% once its manufacturing reshaping program is complete. Management expects temporary headwinds from unused capacity charges and restructuring costs to largely fade in the second half of 2027, with more than 400 basis points of structural gross margin improvement expected to materialize toward the end of 2027 or early 2028.

Other factors worth monitoring include inventory levels in the distribution channel, which continue to track below the company's standard target, and the pace of automotive and industrial demand recovery. Input cost increases and potential changes to global trade tariffs remain areas of uncertainty that could influence both revenue and margin outcomes in the quarters ahead.

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