SOURCE: STMicroelectronics

July 17, 2012 17:59 ET

STMicroelectronics : STMicroelectronics' JV ST-Ericsson Reports 2012 Second Quarter Financial Results

PR No.: C2685C

STMicroelectronics' JV ST-Ericsson Reports 2012 Second Quarter Financial Results

GENEVA--(Marketwire - Jul 17, 2012) - STMicroelectronics (NYSE: STM) announced today that ST-Ericsson, a joint venture of STMicroelectronics and Ericsson, has reported today its 2012 second quarter results ended June 30, 2012. The full text of the press release is appended below and is also available at: http://www.stericsson.com/press_releases/Q22012.jsp

About ST
ST is a global leader in the semiconductor market serving customers across the spectrum of sense and power technologies and multimedia convergence applications. From energy management and savings to trust and data security, from healthcare and wellness to smart consumer devices, in the home, car and office, at work and at play, ST is found everywhere microelectronics make a positive and innovative contribution to people's life. By getting more from technology to get more from life, ST stands for life.augmented.

In 2011, the Company's net revenues were $9.73 billion. Further information on ST can be found at www.st.com

(see ST-Ericsson release here below)

ST-Ericsson reports second quarter 2012 financial results

  • Net sales $344 million; 19 percent sequential increase
  • Adjusted operating loss1) $235 million; $62 million improvement over prior quarter
  • Transfer of application processor development organization finalized on July 1

Geneva, Switzerland, July 17, 2012 - ST-Ericsson, a joint venture of STMicroelectronics (NYSE: STM) and Ericsson (NASDAQ: ERIC), reported financial results for the second fiscal quarter ending June 30, 2012.

Sales in the second quarter increased 19 percent over the prior quarter reflecting a significant ramp of volumes of NovaThor™ platforms shipping to our major customers. Adjusted operating loss decreased sequentially by $62 million to $235 million, as the result of volume and margin improvements due to new platforms and the first steps of the ongoing actions to reduce operating expenses.

Didier Lamouche, President and CEO of ST-Ericsson said: "This has been a quarter of progress across the board. We ramped our NovaThor ModAp platform with Samsung and Sony Mobile Communications and also added several new Chinese key players. We are executing in a timely manner our new strategic plan to reposition our whole business model and we finalized on July 1, as anticipated, the transfer of the application processors development team to STMicroelectronics to build a world class partnership.

We are advancing towards our objective to reduce our breakeven point and to reach sustainable profitability. During the quarter, all profit and loss metrics showed a sequential improvement: from revenue growth to gross margin expansion and from expense reduction to the decrease of our operating loss. While these indicators are encouraging, we recognize that further improvements in the execution of our critical programs are needed. Moreover, we operate in a very dynamic, fast-changing market and a highly competitive environment. In this context our primary focus is on delivering improvements of operating results and cash flow."

2012 second quarter financial summary (unaudited)

             
$ million   Q2 2012   Q1 2012   Q2 2011
Income Statement            
NET SALES   344   290   385
OPERATING INCOME/(LOSS) ADJUSTED1) for:   (235)   (297)   (181)
- amortization of acquisition-related intangibles   (19)   (19)   (25)
- restructuring charges   (56)   (10)   (15)
OPERATING INCOME / (LOSS) as reported   (309)   (326)   (222)
NET INCOME / (LOSS)   (318)   (312)   (221)
             
             
$ million   Q2 2012   Q1 2012   Q2 2011
Additional financial dataNet financial position2) Cash, cash equivalents & short-term deposits/debt, net   33  
 22
  18
Parent companies short-term debt   (1238)   (978)   (445)
Net financial position   (1205)   (956)   (427)
Net operating cash flow3)   (249)   (159)   (233)
             

Additional financial information
The net financial position2) at the end of the second quarter was negative $1205 million.
Inventory decreased by $38 million reaching $171 million at the end of the second quarter.

Outlook
Given, on one hand, the very substantial revenue growth during the second quarter and, on the other hand, the macro-economic and industry environment, ST-Ericsson expects net sales to be approximately flat sequentially for the third quarter 2012.

Highlights -- products, technology and wins announced in the second quarter 2012

  • Customers
    • Samsung continues to incorporate the ST-Ericsson NovaThor ModAp platforms into their award-winning Samsung GALAXY smartphone line with the announcement of the Samsung GALAXY Beam and Samsung GALAXY Ace 2. 
    • China Unicom and Yulong are now customers of the NovaThor platform. The NovaThor U8500 ModAp platform powers the new Coolpad Cheer CP7728. 
    • The Xperia™ go smartphone became the fourth phone this year from Sony Mobile Communications to leverage the ST-Ericsson NovaThor platform. 
    • The Shanda Bambook smartphone -- the first from the China-based company -- is powered by the ST-Ericsson NovaThor U8500 ModAp solution. It is the first of several smartphones planned by Shanda to use the ST-Ericsson NovaThor platform. 
    • Two new Panasonic ELUGA devices for the Japanese market are powered by the compact yet power efficient Thor M5780 thin modem. 
    • A new Sharp AQUOS smartphone is based on the power efficient ST-Ericsson Thor M5730 and available now in Japan. 
  • Partners/technology
    • STMicroelectronics secured additional sourcing for 28nm and 20nm FD-SOI Technology with GLOBALFOUNDRIES. ST-Ericsson selected ST FD-SOI technology for use in its future mobile platforms, which will enable enhanced performance from the ST-Ericsson NovaThor platform with much less battery usage.

Financial results appendix (unaudited)
Consolidated Balance sheet

         
In $ million   June 30, 2012   December 31, 2011
ASSETS        
Current assets:        
Cash and cash equivalents   33   9
Trade accounts receivable, net   50   97
Inventories, net   171   223
Deferred tax assets   10   8
Other receivables and assets   113   102
Total current assets   377   439
         
Goodwill   742   745
Other intangible assets, net   378   437
Property, plant and equipment, net   316   364
Long-term deferred tax assets   218   188
Other investments and other non-current assets   26   70
    1,681   1,804
Total assets   2,058   2,243
         
LIABILITIES AND SHAREHOLDERS' EQUITY    
Current liabilities:        
Short-term borrowings and current portion of long-term debt   1,238   807
Trade accounts payable   176   175
Other payables and accrued liabilities   296   292
Deferred tax liabilities   0   0
Accrued income tax   7   8
Total current liabilities   1,718   1,282
         
Reserve for pension and termination indemnities   94   87
Long-term deferred tax liabilities   4   3
Other non-current liabilities   25   25
    123   115
Total liabilities   1,841   1,397
Total equity   217   846
Total liabilities and equity   2,058   2,243
         

Footnotes
1) The adjusted operating income/(loss) is defined as the operating income/(loss) reported before amortization of acquisition-related intangibles and restructuring charges and is used by management to help enhance the understanding of ongoing operations and to communicate the impact of the items on the operating loss as reported.
2) Net financial position represents the balance between financial assets, which comprise cash, cash equivalents and short-term deposits, and financial debt which includes bank overdrafts and parent companies short-term bridge credit facilities.
3) Net operating cash flow is defined as net cash from operating activities, less capital expenditure and less restructuring charges.

Notes to editors
ST-Ericsson invites journalists, analysts and investors to a conference call scheduled on July 18 at 12:00 pm (CET). Call-in numbers, a live webcast of the conference call, as well as supporting slides, will be available at www.stericsson.com/investors/investors.jsp.

About ST-Ericsson
ST-Ericsson is a world leader in developing and delivering a complete portfolio of innovative mobile platforms and cutting-edge wireless semiconductor solutions across the broad spectrum of mobile technologies. The company is a leading supplier to the top handset manufacturers and generated sales of $1.7 billion in 2011. ST-Ericsson was established as a 50/50 joint venture by STMicroelectronics (NYSE: STM) and Ericsson (NASDAQ: ERIC) in February 2009, with headquarters in Geneva, Switzerland.

www.stericsson.com
www.twitter.com/STEricssonForum

FOR FURTHER INFORMATION, PLEASE CONTACT:
Global Communications & Media Relations
Claudia Levo, Geneva, Switzerland

Investor & Analyst Relations
Fabrizio Rossini, Geneva, Switzerland

Phone: +41 22 929 6973
Email: investor.relations@stericsson.com

Pamela McCracken, Santa Clara, U.S.A.
Phone: +1 408 919 8743 
Email: media.relations@stericsson.com

Ericsson Investor Relations
Åsa Konnbjer, Stockholm, Sweden
Phone: +46 10 713 3928
E-mail: investor.relations@ericsson.com

STMicroelectronics Investor Relations
Tait Sorensen, Phoenix AZ, US
Phone: +1 602 485 2064
Celine Berthier, Geneva, Switzerland
Phone: +41 22 929 5812
Email: investors@st.com

The ST-Ericsson results reported in this press release do not reflect in their entirety the results of the Wireless Segment of STMicroelectronics, which include other activities that are not part of ST-Ericsson.

This press release contains forward-looking statements that involve inherent risks and uncertainties. We have identified certain important factors that may cause actual results to differ materially from those contained in such forward-looking statements. For a detailed description of risk factors see STMicroelectronics' (NYSE: STM) and Ericsson's (NASDAQ: ERIC) filings with the US Securities and Exchange Commission, particularly each company's latest published Annual Report on Form 20-F.

PDF Version: http://hugin.info/152740/R/1627452/520878.pdf

Contact Information

  • For further information, please contact:

    INVESTOR RELATIONS:
    Tait Sorensen
    Director, Investor Relations
    Tel: +1 602 485 2064
    tait.sorensen@st.com

    MEDIA RELATIONS:
    Maria Grazia Prestini
    Group VP
    Tel: + 41 22 929 6945
    mariagrazia.prestini@st.com