Shares in STMicroelectronics NV (NYSE:STM) tumbled in pre-market trade Wednesday after the Franco-Italian chipmaker, a supplier for Apple Inc (NASDAQ: AAPL) and Tesla Inc (Tesla Inc), gave a weaker-than-expected revenue growth forecast for the fourth quarter.
Wall Street is hypersensitive about any change in guidance from semiconductor manufacturers, which are a key element in the supply chain for large carmakers and smartphone manufactures.
"We still face soft market conditions in China and some inventory corrections," STMicroelectronics CEO Jean-Marc Chery told analysts in reference to the sale of microcontrollers.
The CEO comments immediately sent shares in STMicroelectronics reeling 11.15% to $14.11.
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STMicro gave a weaker-than-expected revenue growth forecast for the fourth quarter saying it expected revenue of $2.66 billion to $2.67 billion. The current consensus revenue estimate is $2.67 billion for the quarter ending December 31, 2018.
For the quarter ended September 2018, STMicroelectronics reported earnings of $0.41 per share on revenue of $2.5 billion. The consensus earnings estimate was $0.37 per share on revenue of $2.5 billion. Revenue grew 18.1% on a year-over-year basis.
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