STMicroelectronics forecast first-quarter revenue slightly above market expectations on Thursday, citing improving conditions in its core end markets, while cautioning that restructuring costs will continue to weigh on results through 2026.
Shares in the Franco-Italian chipmaker rose as much as 5% in early trading and were up 2.2% by 1115 GMT, as investors reacted to signs that the downturn following the post-pandemic slowdown may be easing.
“We are entering 2026 with better visibility than entering 2025, with the inventory correction in distribution progressively improving,” Chief Executive Jean-Marc Chery said during an investor call.
STMicro’s main markets—automotive, industrial and consumer electronics—have been under pressure in recent years as demand normalised after the pandemic, inventories accumulated and customers reduced orders. The company reported fourth-quarter net income of $125 million, missing market expectations of $222 million and falling sharply from $369 million a year earlier. Excluding a $141 million impairment linked to restructuring, net income would have reached $266 million.
Looking ahead, STMicro forecast first-quarter revenue of about $3.04 billion, up from $2.71 billion a year earlier and above analysts’ average estimate of $2.99 billion, according to LSEG data.
“Slightly better than expected fourth-quarter results and an above seasonal first-quarter guidance are good signs that the group is seeing better trends,” said Stephane Houri, an analyst at ODDO BHF, in a note.
Unlike high-profile artificial intelligence chipmakers such as Nvidia or memory suppliers like Samsung Electronics, STMicro focuses on microcontrollers and power-management components—chips that underpin everyday electronics and are used in products ranging from smartphones to electric vehicles, including those produced by Tesla.
The company is also in the midst of a contested restructuring of its European manufacturing footprint, shifting production away from older facilities in France and Italy toward more advanced sites. Chief Financial Officer Lorenzo Grandi said some restructuring-related costs would be spread across every quarter of 2026, although the fourth quarter represented the peak impact.
“The fourth quarter definitely is on the high side,” Grandi told Reuters, adding that operational charges are expected to decline significantly over the year, supporting a gradual improvement in gross margins through 2026.
STMicro had already recorded an impairment related to restructuring in July, which resulted in its first net loss in more than a decade, highlighting the scale of the transition under way.
