SAN FRANCISCO STMicroelectronics Tuesday (July 26) reported net revenue of $2.16 billion for the second quarter, an increase of 3.8 percent from the $2.08 billion that the company reported for the first quarter, but down nominally from the $2.17 billion the company reported for the same period a year ago.
STMicro reported operating income of $12 million and net income of $26 million, or 3 cents per share for the second quarter. The company posted a net loss of $31 million during the first quarter.
But net income was down a sharp 82 percent on a year-over-year basis. The company reported net income of $148 million for the second quarter of 2004.
Gross profit increased 4.4 percent to $714 million from $685 million in the first quarter, despite what the company described as continuing price pressure in memory and standard products. Gross margin was 33 percent in the second quarter, up nominally from 32.9 percent in the first quarter, according to STMicro.
STMicro (Geneva, Switzerland) said sequential sales growth was primarily driven by wireless and automotive applications. Several applications experienced double-digit year-over-year sales growth, including wireless and automotive, the company said, but the year-over-year increases were offset by sales declines in consumer applications and the distribution market.
As a result of restructuring initiatives currently underway, STMicro said it incurred $22 million of impairment, restructuring charges and other related closure costs during the second quarter, including $16 million from the company's May announcement that it would reduce its workforce outside Asia by about 6 percent by mid-2006. For the first quarter, the company recorded restructuring related expenses of $78 million.
Carlo Bozotti, STMicro president and CEO, said the company expects the company's gross margin to increase sequentially through the second half of year. He said the company expects sequential sales growth of up to 6 percent for the third quarter.
"Looking to the second half of the year, within an environment of moderate industry growth, we believe ST has the opportunity to expand sales in several key markets," Bozotti said. ”This, coupled with our ongoing initiatives, will allow for improved financial performance for the remainder of 2005 and into 2006."
STMicro said net revenue for the first half was $4.24 billion, an increase of 1 percent over the 2004 first half revenue of $4.20 billion.