October 24, 2018 / 6:47 AM / 9 months ago

UPDATE 1-STMicro upholds bullish 2018 growth target on strong automotive, imaging sales

* Sees 2018 sales growing 16 pct

* Strong demand from auto, smartphone sensors

* Q3 sales growth above consensus (Recasts story, adds details, background)

By Mathieu Rosemain and Gwénaëlle Barzic

PARIS, Oct 24 (Reuters) - Franco-Italian chipmaker STMicroelectronics upheld its bullish growth target for 2018 on Wednesday, bolstered by strong demand from the car and smartphone industries for its sensors.

New chief executive Jean-Marc Chery said he expected full-year revenues to grow by about 16 percent, after the Geneva-based company reported better-than-expected quarterly results that contrasted with those from some its peers.

STM's upbeat sentiment could alleviate recent investors' concerns about the chipmakers industry, following a disappointing forecast by smaller rival AMS AG, which lost a quarter of its market value on Tuesday.

STMicro's third-quarter net revenue rose 11.2 percent from the second-quarter to $2.52 billion, above the company's midpoint target, while operating income rose by 38 percent over the period to $398 million. Gross margin stood at 39.8 percent.

STMicro, a key supplier for Apple phones and Tesla vehicles, is rebounding from earlier setbacks this decade after it narrowed its product portfolio, cut costs and reorganized production at its factories.

In a context of slowing smartphone sales and rising risks over a trade war between China and the United States, chipmakers' stock market prices have recently been impacted by to any negative news from key clients such as Apple.

STMicro, which competes in Europe against Infineon Technologies and Dialog Semiconductor, has fallen in the industry's rankings over the years, raising questions about its capacity to remain independent.

STMicro nevertheless said it expected fourth-quarter revenues to grow by about 5.7 percent from the previous quarter, with a gross margin of 39.8 percent. (Reporting by Mathieu Rosemain and Gwenaelle Barzic; Editing by Sudip Kar-Gupta)

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