STMicroelectronics Forecasts $4.15 Billion Fourth-Quarter Sales After 18% Revenue Growth

STMicroelectronics forecast fourth-quarter revenue of about $4.15 billion on Thursday, October 29, after reporting a 17.9% year-on-year rise in third-quarter sales. The Franco-Italian chipmaker said demand from communications equipment, consumer electronics and emerging applications such as AI data centres helped support its recovery.

Revenue for the three months ended September 26 was $3.757 billion, compared with $3.187 billion in the equivalent quarter of 2025. Gross profit reached $1.401 billion, producing a gross margin of 37.3%, up from 33.2% a year earlier. Reported operating income rose to $367 million from $180 million, while net income increased to $291 million from $237 million.

The distinction between reported and adjusted earnings matters. Excluding specified restructuring, impairment and acquisition-related items, operating income was $429 million, compared with $217 million a year earlier. Reuters reported that this adjusted figure exceeded the $400.5 million average estimate of analysts surveyed by LSEG. The company also recorded $55 million in impairment and restructuring-related charges during the quarter.

STMicroelectronics expects fourth-quarter revenue of approximately $4.15 billion at the midpoint of its guidance, with a range of plus or minus 3.5%. That would represent about 10.5% sequential growth. It projects a fourth-quarter gross margin near 39%, subject to a two-percentage-point range. These are management forecasts, not completed financial results.

Sales in the embedded-processing segment increased 24.1% year on year to $1.212 billion, while RF optical communications revenue rose 46.2% to $504 million. The latter segment's performance illustrates the company's exposure to communications infrastructure as well as the automotive and industrial applications for which it is widely known. Power and discrete products continued to face pressure: despite higher revenue, that segment reported an operating loss of $81 million.

Management identified AI data centres and low-Earth-orbit satellite communications as contributors to its outlook. It expects approximately $14.5 billion in full-year revenue, up about 22.8% from 2025. The company's own figures show both stronger bookings and a tighter supply environment, although future revenue will depend on customer orders, manufacturing capacity and demand conditions.

Operating cash flow was $1.02 billion in the quarter, and the company reported $351 million of free cash flow under its non-US-GAAP definition. These measures should not be confused with net income or treated as interchangeable. The results point to an improving semiconductor cycle, but the strength of that recovery remains uneven across STMicroelectronics' businesses.