KUALA LUMPUR, July 29 (Bernama) -- Bursa Malaysia rebounded to close higher on Wednesday on selective buying of defensive stocks after a volatile trading session. IPPFA Sdn Bhd director of investment strategy and country economist Mohd Sedek Jantan said consumer products and services stocks lifted the key index higher, overcoming lingering geopolitical concerns. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) rose 3.08 points to 1,715.56 from yesterday’s close of 1,712.48. The benchmark index, which opened 1.91 points higher at 1,714.39, moved between 1,710.79 and 1,720.59 during the day’s trading. In the broader market, gainers outstripped decliners 550 to 476, while 612 counters were unchanged, 1,129 untraded, and 48 suspended. Turnover rose to 2.96 billion units valued at RM2.48 billion from 2.94 billion units valued at RM2.56 billion on Tuesday.
STMicroelectronics reported a US$133 million loss in Q2, marking its first quarterly loss in more than 10 years, as restructuring and impairment costs weighed heavily on its bottom line—missing analyst expectations by a wide margin.
Shares in the Franco-Italian chipmaker plunged 11% in early trade, setting course for their worst trading day since July 2024.
What Went Wrong?
Analysts had forecast a profit of US$56.2 million, but instead STMicro posted a US$133 million loss.
The company revealed US$190 million in restructuring and impairment charges.
Excluding those costs, STMicro says it would have posted a US$57 million profit.
A Manufacturing Model Under Pressure
STMicro’s 80% reliance on in-house manufacturing has turned into a burden during the slowdown, leading to underutilized factories and higher labor costs — unlike peers like Infineon or NXP, who rely more on contract manufacturers.
“Heavy exposure to weak automotive, industrial, and consumer chip segments, combined with geopolitical risks and inventory issues, continues to challenge legacy chipmakers,” noted analysts.
Cost-Cutting Amid Political Tension
In a bold move to regain profitability, STMicro launched a cost-saving plan in 2024, including:
Aiming to cut 5,000 jobs across France and Italy by 2027
Restructuring manufacturing operations to save hundreds of millions
However, this sparked political backlash, with the Italian government attempting to oust CEO Jean-Marc Chery, accusing the management of insider trading—a charge Chery has firmly denied.
A Glimpse of Hope?
Despite the headline loss, revenue climbed to US$2.76 billion, beating both company guidance (US$2.71B) and analyst estimates.
Looking ahead:
STMicro expects Q3 revenue to hit US$3.17 billion, surpassing Wall Street's forecast of US$3.1 billion
The company hinted in June that it was seeing the early signs of a market upcycle
No Full-Year Guidance (Yet)
STMicro has not released guidance for full-year 2025, leaving investors cautious but watching closely for signs of a sustained recovery.
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