October 24, 2019 / 11:47 AM / a month ago

STMicro lifted by smartphone sensors and new auto chips

PARIS (Reuters) - Franco-Italian chipmaker STMicroelectronics’s quarterly results were slightly ahead of market expectations, helped by demand for more sophisticated chips aimed at the auto and smartphone industries.

The supplier to iPhone maker Apple and electric carmaker Tesla notably provides components that help to make electric cars more independent as well as sensors for connected objects intended to improve efficiency of industrial processes.

STMicro’s shares were among the top performers on France’s benchmark index CAC 40 on Thursday, advancing more than 6% by 1054 GMT.

Third-quarter sales grew 17.5% from the previous quarter to $2.55 billion, with the 37.9% gross margin for the period beating previous guidance.

The Geneva-based group expects fourth-quarter sales to grow by about 5% from the third quarter and forecasts full-year revenue of $9.48 billion with an operating margin above 10%.

Chipmakers have sent mixed signals about the demand outlook, with Taiwan’s TSMC offering record investment plans for 2019 and 2020 on strong 5G smartphone sales, while Texas Instruments Inc gave a disappointing revenue forecast, citing the U.S.-China trade war.

The world’s second-largest memory chipmaker, SK Hynix Inc also reported better than expected quarterly profit on Thursday and said that 5G-enabled smartphones should help to lift the global memory market out of the doldrums next year.

Reporting by Mathieu Rosemain; Editing by David Goodman

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