STMicroelectronics (STM) saw its stock price plummet 5.12% in pre-market trading on Thursday, following the company's release of its third-quarter results and fourth-quarter outlook. The European chip maker's forecast for the upcoming quarter fell short of analyst expectations, signaling a slower-than-anticipated recovery in the semiconductor industry.

For the fourth quarter, STMicroelectronics projects revenue of approximately $3.28 billion, which is below the average analyst estimate of $3.35 billion. This outlook translates to a full-year 2025 revenue forecast of about $11.75 billion, marking a significant decline from the $13.27 billion reported in 2024. The company attributed this underwhelming projection to a sluggish recovery in demand for chips used in automotive and industrial applications, as customers continue to work through inventories built up during the pandemic.

The third-quarter results also reflected the challenging market conditions. STMicroelectronics reported revenue of $3.19 billion, down 2% year-over-year, while net income fell to $237 million from $351 million in the same period last year. In response to the current market environment, the company has reduced its annual capital expenditure plan to slightly below $2 billion, down from its previous forecast of $2 billion to $2.3 billion. CEO Jean-Marc Chery acknowledged the ongoing challenges, citing geopolitical tensions and trade issues as additional factors impacting the semiconductor industry's recovery.