* CEO points to risks of trade war escalation
* Shares fall, worst CAC 40 performer
* Q3 profit margin guidance below consensus
* Group confirms full-year targets (Recasts story, adds shares reaction, CEO quote)
By Mathieu Rosemain and Gwénaëlle Barzic
PARIS, July 25 (Reuters) - STMicroelectronics's shares fell sharply in early trading on Wednesday, as concerns over rising global trade tensions and cautious guidance overshadowed the group's quarterly results.
STMicro's new boss Jean-Marc Chery said there was currently "negligible" direct impact of trade tariffs between the United States and China, but told analysts: "If the trade war escalates we are more concerned about the consequences that it can have on global macro environment."
The chipmaker's stock was down by 4 percent at 1026 GMT to 19.7 euros, making it the worst performer of France's benchmark CAC 40 market index and reversing Tuesday's gains.
Analysts cited the risks posed by a possible escalation of trade tariffs and slightly lower-than-expected guidance for third-quarter profit margin as the main factors explaining the negative market reaction.
"We were rather surprised because net profits are good, in a sector that is receptive to trade tensions,"
"It's the consequence of the trade war prism with Donald Trump," said Philippe Cohen, an asset manager at Kiplink Finance.
STMicro expects gross margin to slip to around 40 percent in the third-quarter, below a market consensus of 40.3 percent. Gross margin stood at 40.2 percent in the second quarter.
STMicro, a key supplier for Apple phones and Tesla vehicles, is rebounding from earlier setbacks this decade after having narrowed its product portfolio, cut costs and reorganized production at its factories.
The group's shares are up 8 percent so far in 2018 and it is now engaged in a race against industry peers NXP, Renesas, Infineon and Texas Instruments to win the best parts of the growing automotive and industrial markets.
A three-day worldwide stocks rally was threatening to stall on Wednesday ahead of a meeting between Trump and the president of the European commission over trade.
The EU executive body is drawing up a list of $20 billion of U.S. goods to hit with duties if Washington imposes tariffs on imported cars, EU trade commissioner said on the eve of that meeting.
The company's second-quarter results came in broadly in line with market expectations and included a 10-percent growth forecast for third-quarter sales compared with the previous quarter.
STMicro is on track to deliver year-on-year growth of its revenues between about 14 and 17 percent, Chery said.
Second-quarter revenue grew by 1.9 percent from the previous quarter to $2.27 billion, in line with an analyst average forecast in a Reuters poll. (Reporting by Mathieu Rosemain and Gwenaelle Barzic; Additional reporting by Patrick Vignal Editing by Sudip Kar-Gupta and Georgina Prodhan)