SAN FRANCISCO STMicroelectronics Tuesday (Oct. 25) reported third quarter net income of $89 million on total revenue of $2.25 billion.
ST's net income of $89 million, which equates to 10 cents per share, represents an increase of more than 242 percent over the net income of $26 million that the company reported for the second quarter. On a year-over-year basis, third quarter net income was down more than 52 percent from the $189 million that ST posted for the third quarter of 2004.
ST's third quarter net revenue of $2.25 billion was up 3.9 percent sequentially from the $2.16 billion that the company reported for the second quarter, and up nearly 1 percent from the $2.23 billion reported for the third quarter of 2004.
ST said its third quarter gross profit increased 7 percent to $766 million from $714 million in the second quarter. The company said its gross margin was 34 percent in the third quarter, up slightly from 33 percent in the second quarter. ST said enhanced product mix and manufacturing performance drove the improvements in gross profit and gross margin, more than offsetting continuing price pressure, especially in memory and standard products.
The telecom sector was responsible for 36 percent of ST's third quarter revenue, the company said, twice the percentage of the next largest segment for the company, computer. The consumer (17 percent), automotive (15 percent) and industrial/other (14 percent) rounded out ST's net revenue breakdown by market segment.
"ST's third quarter financial performance, which was well in line with our outlook, showed sequential improvements in revenues, gross margin, and earnings per share," said Carlo Bozotti, ST's president and CEO, in a statement. "Additionally, we were pleased by the significant increase in net operating cash flow resulting from our capital management. "
Bozotti said the company believes moderate industry growth will continue into the final quarter of 2005 and through 2006. Accordingly, he said, the company expects sequential revenue to growth by 3-9 percent in the fourth quarter and for gross margin to grow to roughly 36 percent.