European chip giant


(STM) - Get Report

warned after the close that its first-quarter sales and gross margin will fall slightly below the bottom of its guidance range -- a painful admission, given that it kicked off the year with an upbeat forecast for a semiconductor rebound.

After hours, shares slipped 25 cents, or 1.3%, to $19.73.

For the just-ended March quarter, Geneva-based STM said its revenues should total about $1.618 billion, compared to the low end of its previously issued guidance of $1.620 billion.

Previously, STM had forecast revenue would be down 6% to 9% sequentially, implying sales of $1.625 billion to $1.679 billion.

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Leading up to today's announcement, Wall Street analysts had been expecting EPS of 13 cents a share on sales of $1.66 billion.

STM also pegged its gross margin at 35%, a hair below the bottom end guidance for 36%.

STM said it had seen order push-outs in March from a number of its end markets, adding that digital consumer products were a "notable exception." It expects most of the affected products to be shipped in the second quarter.

Gross margin was hurt by worse-than-expected pricing pressure and a strengthening euro.

In January, chief economist Jean-Philippe Dauvin had predicted a soft recovery in the second quarter should "blossom" in the third and fourth quarter, amid a return to meaningful growth, according to a



STM is scheduled to report first-quarter earnings on April 24.