STMicroelectronics reported US GAAP financial results for the second quarter ended June 27, 2020. ST reported second quarter net revenues were $2.09 billion, with gross margin of 35%, operating margin of 5.1%, and net income of $90 million or $0.10 diluted earnings per share.

“During the second quarter, we returned to normal operations, supporting our customers’ demand and continuing to ensure the health and safety of our employees,” Jean-Marc Chery, STMicroelectronics president and CEO, said.

“Q2 net revenues decreased 6.5% sequentially. As expected, this was due to the decline in Automotive, Analog and Imaging products, partially offset by growth in Microcontrollers, Digital and Power Discrete. Second quarter gross margin includes 310 basis points of unsaturation charges,” Chery added. “The first half of 2020 reflects year-over-year growth of 1.6%, driven by Analog, Imaging and Microcontrollers, partially offset by Automotive and Power Discrete.

“Looking at the third quarter, we expect sequential revenue growth of 17.4% at the mid-point. This growth will be driven by engaged customer programs, new products and improved market conditions. Gross margin is expected to be 36% at the mid-point, including about 200 basis points of unsaturation charges,” he noted
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“We will drive the company based on an updated plan for FY20 net revenues between $9.25 billion and $9.65 billion with growth in the second half over the first half to be in the range of $610 million to $1.01 billion. We expect this growth to be driven by engaged customer programs, new products and improved market conditions. Our CAPEX plan for 2020 is now about $1.2 billion,” Chery concluded.

Free cash flow (non-US GAAP) was positive $28 million in the second quarter, compared to negative $67 million in the year-ago quarter.