Gross profit totaled $967 million, representing a year-over-year decrease of 3.6%. Gross margin of 37.9% decreased 190 basis points year-over-year, mainly impacted by price pressure and unsaturation charges. Third quarter gross margin was 40 basis points higher than the mid-point of the Company’s guidance, mainly due to a lower level of unsaturation charges. Third quarter gross margin includes about 110 basis points of unsaturation charges.
Operating income decreased 15.6% to $336 million, compared to $398 million in the year-ago quarter. The Company’s operating margin decreased 270 basis points on a year-over-year basis to 13.1% of net revenues, compared to 15.8% in the 2018 third quarter.
By product group, compared with the year-ago quarter:
Automotive and Discrete Group (ADG):
- Revenue increased in Power Discrete and decreased in Automotive.
- Operating profit decreased by 34.5% to $76 million. Operating margin was 8.5% compared to 12.8%.
Analog, MEMS and Sensors Group (AMS):
- Revenue increased in Imaging, Analog and MEMS.
- Operating profit increased by 26.1% to $198 million. Operating margin was 20.5% compared to 17.5%.
Microcontrollers and Digital ICs Group (MDG):
- Revenue decreased in both Microcontrollers and Digital ICs.
- Operating profit decreased by 9.2% to $108 million. Operating margin was 15.7% compared to 16.6%.
Net income and diluted earnings per share decreased to $302 million and $0.34, respectively, compared to $369 million and $0.41, respectively, in the year-ago quarter.
Cash Flow and Balance Sheet Highlights
| Trailing 12 Months | ||||||
| (US$ m) | Q3 2019 | Q2 2019 | Q3 2018 | Q3 2019 | Q3 2018(1) | TTM Change |
| Net cash from operating activities | $429 | $324 | $373 | $1,749 | $1,775 | (1.5)% |
| Free cash flow (non-U.S. GAAP) | $170 | $(67) | $114 | $399 | $314 | 27.1% |
