By Martin Coulter
LONDON (Reuters) -European chipmaker STMicroelectronics beat fourth-quarter sales and earnings expectations on Thursday, as strong demand from automotive and industrial customers helped it cope with challenging economic conditions.
Shares in the company, whose clients include iPhone maker Apple (NASDAQ:AAPL) and electric carmaker Tesla (NASDAQ:TSLA), jumped as much as 9% to a one-year high of 43.10 euros as it hit its 2022 revenue target of $16.1 billion.
Citing strong demand and increased manufacturing capacity, CEO Jean-Marc Chery said STMicro expected 2023 revenue of $16.8 billion to $17.8 billion - putting it well on course for its target of $20 billion by 2027.
Rival Texas Instruments (NASDAQ:TXN) forecast first-quarter revenue and profit below Wall Street targets on Wednesday.
"Good numbers across the board", said Paul Allison, an analyst at investment platform Finimize of STMicro's performance. But he warned demand from the automotive industry might stagnate in 2023.
"The auto industry is strong, but it's hard to know how long that will last," he said. "If we are heading into a recession, you'd expect demand for cars to struggle, but personal electronics may see an upturn."
STMicro's net revenue rose to $4.42 billon in the fourth quarter from $4.32 billion the previous quarter. Analysts had on average expected sales of $4.32 billion, IBES data from Refinitiv Eikon showed.
Fourth-quarter diluted earnings per share of $1.32 beat analysts' average estimate of $1.09, IBES data showed.
STMicro said capital spending was $3.52 billion in 2022, and it planned to raise that to about $4 billion this year, primarily to increase manufacturing capacity.
Fourth-quarter net income rose to $1.25 billion, up 12% from the previous quarter.