ST, despite having announced its decision to get out of the struggling joint venture ST-Ericsson in December, has reported more losses, more JV-related costs and forecast a poor first quarter of 2013.
STMicroelectronics NV, Europe's largest and broadest chip company continues to suffer under the burden of its wireless joint venture with Ericsson. ST announced in December that it planned to be out of the joint venture by the 3Q13.
However, that is only little comfort to shareholders today. ST made a net loss of $428 million, mainly due to a $544 million charge for the impairment of goodwill and other intangible assets at ST-Ericsson. ST has also excused its subsidiary of the need to pay back just over $750 million of debt built up over the last three years of losses.
ST announced fourth quarter net revenues of $2.16 billion roughly flat with 3Q12 and marginally down from $2.19 billion in 4Q11.
And ST expects 1Q13 to be a poor quarter with a sequential decrease of about 7 percent, partly on the forecast of poor sales at ST-Ericsson in 1Q13.
On top of these burdens ST stated that it now expects the exit of ST-Ericsson to cost in between $300 million and $500 million over the period to whenever the exit is achieved.
Carlo Bozotti, CEO of ST, said that semiconductor conditions are expected to improve in 2013, driven by a more favorable economic environment. "In particular, we expect imaging, microcontrollers, analog and MEMS to be the highest contributors to our revenue performance," Bozotti said in a statement.
For the full year 2012 ST made a net loss of $1.16 billion on sales of $8.49 billion, which compares to a net profit of $650 million on sales of $9.73 billion in 2011.
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