Gross profit totaled $1.25 billion, representing a year-over-year increase of 16.0%. Gross margin of 38.8% decreased 50 basis points year-over-year, mainly due to usual price pressure and negative currency effects, net of hedging, partially offset by improved mix and lower unloading charges. Fourth quarter gross margin was 30 basis points above the mid-point of the Company’s guidance.
Operating income increased 42.7% to $657 million, compared to $460 million in the year-ago quarter. The Company’s operating margin increased 360 basis points on a year-over-year basis to 20.3% of net revenues, compared to 16.7% in the 2019 fourth quarter. Fourth quarter other income and expenses, net, was $131 million compared to $54 million to the year-ago quarter mainly due to a non-recurrent favorable impact mainly associated with the Important Projects of Common European Interest (IPCEI) R&D grants catch-up.
By product group, compared with the year-ago quarter:
Automotive and Discrete Group (ADG):
- Revenue increased in both Automotive and in Power Discrete.
- Operating profit decreased by 16.4% to $94 million. Operating margin was 9.9% compared to 12.2%.
Analog, MEMS and Sensors Group (AMS):
- Revenue increased in Imaging, Analog and MEMS.
- Operating profit increased by 42.9% to $402 million. Operating margin was 28.3% compared to 25.9%.
Microcontrollers and Digital ICs Group (MDG):
- Revenue increased in Microcontrollers and decreased in RF Communications.
- Operating profit increased by 46.4% to $174 million. Operating margin was 20.3% compared to 16.0%.
Unused capacity charges are included under the group “Others”.
Net income and diluted earnings per share increased to $582 million and $0.63, respectively, compared to $392 million and $0.43, respectively, in the year-ago quarter.
Cash Flow and Balance Sheet Highlights
| Trailing 12 Months | ||||||
| (US$ m) | Q4 2020 | Q3 2020 | Q4 2019 | Q4 2020 | Q4 2019 | TTM Change |
| Net cash from operating activities | 922 | 385 | 775 | 2,093 | 1,869 | 12.0% |
| Free cash flow (non-U.S. GAAP) | 512 | (25) | 461 | 627 | 497 | 26.2% |
