Gross profit totaled $830 million, representing a year-over-year decrease of 8.9%. Gross margin of 38.2% decreased 200 basis points year-over-year, mainly impacted by usual sales price pressure, unfavorable product mix and unsaturation charges. Second quarter gross margin was 30 basis points lower than the mid-point of the Company’s guidance, mainly due to unfavorable product mix. Second quarter gross margin includes 80 basis points of unsaturation charges.
Operating income decreased 32.0% to $196 million, compared to $289 million in the year-ago quarter. The Company’s operating margin decreased 370 basis points on a year-over-year basis to 9.0% of net revenues, compared to 12.7% in the 2018 second quarter.
By product group, compared with the year-ago quarter:
Automotive and Discrete Group (ADG):
- Revenue increased in both Automotive and Power Discrete.
- Operating profit decreased by 13.1% to $73 million. Operating margin was 8.2% compared to 9.7%.
Analog, MEMS and Sensors Group (AMS):
- Revenue increased in MEMS and Sensors while Analog decreased.
- Operating profit increased by 15.6% to $74 million. Operating margin was 10.7% compared to 10.5%.
Microcontrollers and Digital ICs Group (MDG):
- Revenue decreased in both Microcontrollers and Digital ICs.
- Operating profit decreased by 71.7% to $45 million. Operating margin was 7.6% compared to 20.3%.
Net income and diluted earnings per share decreased to $160 million and $0.18, respectively, compared to $261 million and $0.29, respectively, in the year-ago quarter.
Cash Flow and Balance Sheet Highlights
| Trailing 12 Months | ||||||||
| (US$ m) | Q2 2019 | Q1 2019 | Q2 2018 | Q2 2019 | Q2 2018(1) | TTM Change | ||
| Net cash from operating activities | $324 | $341 | $360 | $1,694 | $1,835 | (7.7)% | ||
| Free cash flow (non-U.S. GAAP) | $(67) | $(67) | $(40) | $343 | $280 | 22.5% | ||
