SAN FRANCISCOSTMicroelectronics NV Wednesday (April 29) reported that its first quarter loss widened on a decline in revenue and announced its wireless joint venture with Ericsson would eliminate 1,200 jobs.
ST's first quarter revenue fell to $1.66 billion in the first quarter, down 27 percent from the previous quarter and 33 percent compared with the same period of 2008, the company said Wednesday (April 29).
ST (Geneva) posted a net loss for the quarter of $541 million, based on U.S. generally accepted accounting principles (GAAP), wider than the company's GAAP net losses of $366 million for the fourth quarter of 2008 and $84 million for the first quarter of 2008, ST said.
ST's loss per share for the first quarter, 62 cents, was greater than the 42 cents per share it lost in the fourth quarter of 2008 and the 9 cents per share it lost in the first quarter of last year, the company said.
Revenue declined year-over-year across all market segments, ST said, reflecting the global economic slowdown. Automotive revenue declined by 47 percent year-to-year, the company said, and computer market revenue was down 42 percent. Revenue was also down sequentially across all markets, the company said.
ST said its wireless joint venture with Ericsson, ST-Ericsson, would eliminate 1,200 jobs as part of a restructuring plan that is expected to save $230 million per year by the second quarter of 2010. This plan is incremental to the $250 million cost synergies program announced by ST-NXP Wireless in November 2008, ST said.
For the first two months of its existence, the ST-Ericsson JV posted a net loss of $89 million on sales of $391 million, according to a statement by the firms Wednesday.
The ST-Ericsson restructuring is being carried out to reflect lower sales volumes and limited visibility on the timing of market recovery and further integration activities following the February merger of Ericsson Mobile Platforms with ST-NXP Wireless.
"Overall, in the first quarter of 2009 we reduced headcount by 3,200, excluding the wireless transaction," said Carlo Bozotti, president and CEO of ST, in a statement. "I believe these actions and others demonstrate that we are well aligned with our goal to reduce costs by over $700 million in 2009 compared to the Company's 2008 fourth quarter annualized base."