LONDON – Financial results for the fourth quarter at troubled mobile chip joint venture ST-Ericsson NV were bleak with sales down, losses up and the outlook bad due to a loss of orders with a large customer. ST-Ericsson reports its own financial numbers, but they are also reported within those of parent STMicroelectronics, which was weighed down by the losses and a difficult outlook.
In its outlook for 1Q12 ST-Ericsson said it expected "a very significant decline in net sales, resulting from a combination of higher inventory at some of our customers, further weakening of legacy product sales, the effect of first quarter seasonality as well as the reduction, in the short term, of new product sales with one of our largest customers."
For the fourth quarter ST-Ericsson (Geneva, Switzerland) reported a net loss of $231 million on sales revenue of $409 million. This compares to a third quarter for which the company reported a net loss of $211 million on sales revenue of $412 million. At the end of the year the company owed its parent companies $800 million and listed just $2 million in cash and short-term deposits on hand.
In a note in the tabulated results ST-Ericsson said "Our shareholders will continue to support funding our transitional financial needs."
Didier Lamouche, who was appointed president and CEO during the fourth quarter replacing Gilles Delfassy, said: "From a financial perspective, it is clear that both sales and operating results will continue to be challenging over the coming quarters, due to the reduction in the short term of new product sales with one of our largest customers. That is why our immediate priority is to build a strong roadmap to profitability based on enhancing execution, delivering in volume our leading products and lowering the break-even point."
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