(Bloomberg) -- STMicroelectronics NV expects sales to carmakers will pick up at the end of the year, after a slump in demand from the sector hit the chipmaker’s revenue.

First-quarter revenue fell 18% year over year to $3.47 billion, the Franco-Italian semiconductor company said in a statement Thursday. That’s below STMicro’s own earlier forecast of a 15% decline and an estimate of $3.63 billion among analysts surveyed by Bloomberg.

The picture looks worse for the current quarter, with sales on track to fall 26% year over year to $3.2 billion, compared with a $3.79 billion estimate from analysts. It’s a “bottom point,”  Chief Executive Officer and President Jean-Marc Chery said during an investor call on Thursday. 

“Compared with our January expectations, the market environment has further deteriorated, with an even stronger inventory correction in industrial slowing the expected growth in the second half of the year compared to our previous expectations,” he said.

The company anticipates revenue run rates to return to 2023 levels by the fourth quarter or the first quarter of 2025, based on “pretty good visibility” on automotive - about half of STMicro’s business - plus personal electronics and computer equipment sales, Chery said.

The outlook for industrial chips is less clear, but Chery said there are signs sales will pick up in the second quarter next year.

After an initial drop on Wednesday, shares rose 2.89% to €40.34 at 12:31 p.m. in Paris, following the optimistic outlook during the earnings call.

The company has lowered its revenue projection for the full year to a range between $14 billion and $15 billion, down from the approximately $15.9 billion and $16.9 billion projected at the end of the last quarter. 

The results come after Texas Instruments Inc., seen as a bellwether for the industry with its wide customer base, forecast strong sales this week, indicating customers have resumed ordering chips after working through their stockpiles of components. STMicro’s chips are used in the smartphone and electric vehicle industries, with customers including Apple Inc. and Tesla Inc. 


(Updates with share price and comments during earnings call)

©2024 Bloomberg L.P.