Gross profit totaled $1.08 billion, representing a year-over-year increase of 2.0%. Gross margin of 39.3% decreased 70 basis points year-over-year, mainly impacted by price pressure and unsaturation charges. Fourth quarter gross margin was 110 basis points higher than the mid-point of the Company’s guidance, mainly due to better than expected manufacturing efficiencies and improved product mix. Fourth quarter gross margin included about 100 basis points of unsaturation charges.
Operating income increased 3.7% to $460 million, compared to $443 million in the year-ago quarter. The Company’s operating margin decreased 10 basis points on a year-over-year basis to 16.7% of net revenues, compared to 16.8% in the 2018 fourth quarter.
By product group, compared with the year-ago quarter:
Automotive and Discrete Group (ADG):
- Revenue decreased in both Automotive and Power Discrete.
- Operating profit decreased by 19.9% to $113 million. Operating margin was 12.2% compared to 14.6%.
Analog, MEMS and Sensors Group (AMS):
- Revenue increased in Analog, Imaging and MEMS.
- Operating profit increased by 39.1% to $281 million. Operating margin was 25.9% compared to 20.5%.
Microcontrollers and Digital ICs Group (MDG):
- Revenue increased in Microcontrollers and was substantially flat in Digital ICs.
- Operating profit decreased by 2.5% to $119 million. Operating margin was 16.0% compared to 17.7%.
Net income and diluted earnings per share decreased to $392 million and $0.43, respectively, compared to $418 million and $0.46, respectively, in the year-ago quarter.
Cash Flow and Balance Sheet Highlights
|Trailing 12 Months|
|(US$ m)||Q4 2019||Q3 2019||Q4 2018||Q4 2019||Q4 2018||TTM Change|
|Net cash from operating activities||775||429||656||1,869||1,845||1.3%|
|Free cash flow (non-U.S. GAAP)||461||170||363||497||533||(6.8)%|
Capital expenditure payments, net of proceeds from sales, were $236 million in the fourth quarter and $1.17 billion for 2019. In the year-ago quarter, capital expenditures, net, were $279 million.