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STMicroelectronics Cautious on 2025 Outlook Amid Weak Q1 Forecast

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STMicroelectronics (STMicro), one of Europe’s leading semiconductor manufacturers, announced on Thursday that it is too early to provide full-year guidance for 2025, as market uncertainties and inventory corrections continue to weigh on its business. The company warned that sales would decline further in the first quarter, reflecting a prolonged downturn in key markets.

STMicro’s stock fell 6.8% to 22.18 euros by 1226 GMT, hitting its lowest level since June 2020. CEO Jean-Marc Chery told analysts that the company expects the first quarter to mark the low point for 2025 but refrained from offering a full-year outlook due to limited visibility in demand recovery.

The company forecast first-quarter revenue of $2.51 billion, a nearly 28% year-over-year drop, falling short of analysts’ expectations of $2.72 billion, according to LSEG’s IBES data. This follows an earlier warning in November about a steeper-than-usual seasonal revenue decline.

The broader semiconductor industry is facing headwinds, with Texas Instruments, a key competitor, also reporting weak first-quarter projections due to inventory buildup in the automotive and industrial sectors.

To manage the downturn, STMicro plans to significantly reduce production days across its fabrication plants, assembly, and test facilities. Finance chief Lorenzo Grandi stated that some manufacturing sites would undergo temporary closures in the first quarter, with additional reductions likely extending into the second quarter.

Despite these challenges, STMicro reported fourth-quarter net income of $341 million, exceeding analysts’ estimates of $326 million. Strong performance in personal electronics partially offset declining industrial sector revenues.

For 2025, the company plans to scale back capital expenditures, targeting an investment of $2 billion to $2.3 billion, compared to $2.53 billion in 2024 and $4 billion in 2023.

 

Nissan Shares Plunge Over 10% Following Disappointing Results and Production Cuts

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Shares of Nissan Motors dropped as much as 10.12% on Friday, hitting a four-year low, after the company posted disappointing quarterly results and announced plans to cut global production capacity by 20%.

In its second-quarter results for the period ending in September, Nissan reported a net loss of ¥9.3 billion (approximately $62 million), a stark contrast to the ¥190.7 billion profit recorded in the same quarter last year. Operating profit fell nearly 85%, plunging to ¥31.9 billion, while revenue dropped by 5% to ¥2.99 trillion.

The company also revised its full-year financial outlook downward, lowering its revenue forecast to ¥12.7 trillion from ¥14 trillion and slashing its operating profit projection to ¥150 billion, down from ¥500 billion.

In response to the challenging situation, Nissan announced plans to reduce its workforce by 9,000 employees and implement cost-cutting measures. These efforts include rationalizing its asset portfolio and focusing on capital expenditure and research and development. The company is targeting a reduction of ¥300 billion in fixed costs and ¥100 billion in variable costs for the 2024 fiscal year.

Additionally, Nissan’s board decided not to issue an interim dividend and scrapped the year-end dividend forecast. CEO Makoto Uchida will voluntarily forfeit 50% of his monthly compensation from November, with other executives also opting for pay cuts.

Nissan’s sales volume for the first half of its fiscal year declined by 1.6%, with 1.6 million units sold. The company aims to return to profitability and positive cash flow by fiscal year 2026, even with annual sales of 3.5 million units.

 

OPEC Bullish on Long-Term Oil Demand Growth, But Many Analysts Disagree

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While global consumers benefit from falling oil prices — with Brent crude dipping below $70 per barrel in early September — OPEC+ faces serious challenges. The oil producer alliance, led by Saudi Arabia, delayed production hikes for an additional two months in an attempt to stabilize prices. However, with low demand forecasts and rising supplies from non-OPEC countries, crude prices remain subdued.

This situation has prompted some market observers to ask if the world has reached “peak oil.” Is oil demand growth now on a long-term decline?

OPEC’s latest World Oil Outlook 2024 report dismisses this notion, projecting strong global energy demand growth of 24% by 2050. It forecasts medium-term oil demand to rise to 112.3 million barrels per day by 2029, a 10.1 million barrel increase from 2023. In contrast, the International Energy Agency (IEA) anticipates oil demand to level off at around 106 million barrels per day by the end of the decade, peaking by then.

The divergence in forecasts between OPEC and the IEA has drawn attention, particularly as the latter advocates for a net-zero emissions future. S&P Global Commodity Insights offers a middle ground, projecting peak demand at 109 million barrels per day in 2034, with a gradual decline to below 100 million barrels per day by 2050.

Despite these differing long-term projections, analysts agree that oil demand will decline in developed economies while rising in emerging markets, especially India.

For the near-to-medium term, analysts remain bearish on oil demand and prices, even after OPEC+ announced extended production cuts into December. Dave Ernsberger from S&P Global Commodity Insights commented that the two-month extension has done little to convince market skeptics of a price rebound.

The key issue, Ernsberger argues, is the transition to a “post-demand growth” era. While oil will remain essential, growth in demand is expected to plateau, driven in part by the rise of alternative energy sources like biofuels in the maritime industry.

External factors, particularly in China, are also posing challenges. As the world’s largest oil importer, China’s shift toward electrification and renewable energy is dampening long-term oil demand prospects. Li-Chen Sim, a non-resident scholar at the Middle East Institute, highlights China’s efforts to reduce its dependence on oil through electric vehicle adoption and renewable energy expansion. Despite China’s slowing economic growth of 3% to 5% annually, the country is structurally reducing oil consumption as part of its energy policy transformation.

In the near term, OPEC+ is expected to restore some production by December. However, internal issues such as some member countries exceeding their quotas, and external factors like increasing production from non-OPEC+ countries (e.g., the U.S., Brazil, and Canada), are keeping prices suppressed.

Looking ahead, many analysts believe that the decline of the oil era, if it happens, will be driven by shifting demand rather than supply shortages. As Sheikh Ahmed Zaki Yamani, a former Saudi oil minister, famously said in 2000, “The Stone Age came to an end not for a lack of stones, and the Oil Age will end, but not for a lack of oil.”