STMicroelectronics (STM, Financials), the semiconductor company that serves automotive, industrial and consumer markets, fell about 12% in premarket trading after its revenue outlook for the third quarter missed Wall Street expectations.
The company forecast third-quarter revenue of about $3.70 billion, up 6.2% sequentially but below the consensus estimate of $3.80 billion. Gross margin is forecast to be 37% +/- 2 percentage points.
Revenue surged 26% from a year earlier to $3.49 billion in the second quarter, while adjusted earnings increased to 31 cents a share. Both figures topped analyst estimates.
But earnings before interest, taxes, depreciation and amortization were $679 million, below the $797.7 million the market projected. STMicroelectronics said it took restructuring charges, impairment expenses and accounting consequences related to its acquisition of an NXP sensor business.
The business lifted its 2026 data center revenue guidance to more than $1 billion and predicted sales may surpass $2 billion in 2027 if demand remains strong.
Management is projecting fourth quarter revenues over $4 billion, helped by AI data centers and low-earth orbit satellite communications.
Investors will now look to see if greater demand for AI-related products will help offset near-term margin pressure and worse third-quarter expectations.