MUNICH, Germany In the second quarter, ST-Ericsson benefited from customers re-stocking and the demand picking up in China. Nevertheless, the company widened its operating loss.
The joint venture of STMicroelectronics and Ericsson which also embraces the former mobile handset device operations of chip maker NXP raised its revenues from $562 million (about 400 million) in Q1 to $666 million in Q2. This equals a hike of 18.5 percent.
The restructuring in the wake of the combination of ST's and NXP's mobile chip activities which led to the workforce reduction of about 500 persons cost $250 million. According to the company, the restructuring process is in line with plans and will be concluded by YE 2009. The expenses associated with that restructuring however loaded the results; under the bottom line the company achieved a net loss of $213 million. For the quarter ahead no data regarding net loss are available the joint venture is just too young. On a pro-forma basis, the operating loss widened from $179 million to $224 million.
CEO Alain Dutheil said he expects the normal seasonal market trends to be continued over the next quarter, with Asia being the main demand driver. In the medium term, the business environment remains uncertain, Dutheil said.
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