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ST should try to beef up it's traditional consumer digital TV market instead of ...
Losses at ST-Ericsson hit ST's bottom line
Mark Lapedus
7/22/2010 7:43 PM EDT
SAN JOSE, Calif. - Despite losses at ST-Ericsson, STMicroelectronics Inc.'s revenues for the second quarter of 2010 totaled $2.531 billion, up 8.9 percent sequentially and up 27 percent year-over-year.
The figures include sales recorded by ST-Ericsson, a joint wireless chip venture between STMicroelectronics and Ericsson. In total, ST reported net income of $356 million in the second quarter of 2010, or $0.39 per diluted share, compared to a net income of $57 million in the prior quarter and a net loss of $318 million in the year-ago period.
ST reported a net gain of $264 million on equity investments and divestiture mainly due to the sale of the company's 48.6 percent stake in NOR flash vendor Numonyx to Micron Technology Inc. Numonyx was a joint venture between Intel and ST.
ST's capital expenditures were $134 million during the second quarter of 2010, compared to $74 million in the year-ago period. For the 2010 first half, capital expenditures totaled $313 million, somewhat below the company's targeted level, due to extended lead times for capital equipment.
Related to the company's cost-realignment initiatives, ST posted second quarter restructuring and impairment charges of $12 million. ST posted restructuring and impairment charges of $33 million and $86 million in the prior quarter and year-ago period, respectively.
On a year-over-year basis, all market segments, except telecom, posted growth. ''Obviously, we are not satisfied with the results in wireless. However, we are encouraged by ST-Ericsson's progress in achieving key design-wins as well as restructuring, towards a progressive recovery,'' said ST President and CEO Carlo Bozotti, in a statement.
For the quarter, ST-Ericsson said sales decreased by 10 percent sequentially to $544 million. This compares to sales of $606 million in the previous period and $666 in the like period a year ago. It posted a loss of $139 million in the quarter, compared to a loss of $154 million in the previous period and a loss of $213 million a year ago.
In a statement, President and CEO, Gilles Delfassy, said: “Our performance in the quarter was the result of both lower sales and our continued tight control of costs. Our sales in the quarter continued to reflect the impact of our ongoing portfolio transition, combined with weaker-than-expected performance in Asia and some supply limitations.''
Its restructuring plans, respectively, of $230 million, announced on April 29, 2009, and of $115 million, announced on Dec. 3, 2009, are on track. In the current quarter, the company expects net sales to be slightly up sequentially.
For ST, the outlook is brighter. "We expect sequential revenue growth of between 2 percent and 7 percent, which equates to solid growth of 13 percent to 19 percent when compared to the year-over-year period,'' Bozotti said.
The figures include sales recorded by ST-Ericsson, a joint wireless chip venture between STMicroelectronics and Ericsson. In total, ST reported net income of $356 million in the second quarter of 2010, or $0.39 per diluted share, compared to a net income of $57 million in the prior quarter and a net loss of $318 million in the year-ago period.
ST reported a net gain of $264 million on equity investments and divestiture mainly due to the sale of the company's 48.6 percent stake in NOR flash vendor Numonyx to Micron Technology Inc. Numonyx was a joint venture between Intel and ST.
ST's capital expenditures were $134 million during the second quarter of 2010, compared to $74 million in the year-ago period. For the 2010 first half, capital expenditures totaled $313 million, somewhat below the company's targeted level, due to extended lead times for capital equipment.
Related to the company's cost-realignment initiatives, ST posted second quarter restructuring and impairment charges of $12 million. ST posted restructuring and impairment charges of $33 million and $86 million in the prior quarter and year-ago period, respectively.
On a year-over-year basis, all market segments, except telecom, posted growth. ''Obviously, we are not satisfied with the results in wireless. However, we are encouraged by ST-Ericsson's progress in achieving key design-wins as well as restructuring, towards a progressive recovery,'' said ST President and CEO Carlo Bozotti, in a statement.
For the quarter, ST-Ericsson said sales decreased by 10 percent sequentially to $544 million. This compares to sales of $606 million in the previous period and $666 in the like period a year ago. It posted a loss of $139 million in the quarter, compared to a loss of $154 million in the previous period and a loss of $213 million a year ago.
In a statement, President and CEO, Gilles Delfassy, said: “Our performance in the quarter was the result of both lower sales and our continued tight control of costs. Our sales in the quarter continued to reflect the impact of our ongoing portfolio transition, combined with weaker-than-expected performance in Asia and some supply limitations.''
Its restructuring plans, respectively, of $230 million, announced on April 29, 2009, and of $115 million, announced on Dec. 3, 2009, are on track. In the current quarter, the company expects net sales to be slightly up sequentially.
For ST, the outlook is brighter. "We expect sequential revenue growth of between 2 percent and 7 percent, which equates to solid growth of 13 percent to 19 percent when compared to the year-over-year period,'' Bozotti said.
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Baolt
7/23/2010 6:16 PM EDT
Van Houten's brilliance was the sale of mobile biz of NXP, or let say joint venture, afterwards given out the acquisition by Ericsson. Many other companies are trying the same nowadays, infineon, freescale etc...Since Nokia, Sony-Ericsson, Sagem keep loosing blood towards Samsung, Apple, HTC, slowly Motorola, we will see more and more loses unfor. As we see there all efforts to cut cost, even firings the workpower didnt help ST-Ericsson a lot. They need for sure some puller product
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Silicon-Trends
7/26/2010 7:29 AM EDT
STMicroelectronics made a big mistake by buying NXP-Wireless division for big money say around $1bilion!
If they have plans to enter wireless market,striaght away they could have gone for JV with Ericsson.
As such NXP-Wireless dint have Much Product portfolio except some entry level 3G chipset.
So the Loss posted by ST-Ericsson is expected & will continue,until the next year ,Which will impact the STMicroelectronics Growth.
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D-san
8/13/2010 2:32 PM EDT
Seems you do not have much insight in these JV's (to say it kindly).
NXP had design wins at Samsung and in China indeed with 2G and entry3G but generating cash.
ST was only generating cash from analog companion IC's (where they indeed had a big share), but ST's baseband business was pretty much nonexistent.
So rather than being a burden on ST-Ericsson, the NXP part is generating revenue and profit.
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Neo1
7/26/2010 8:44 AM EDT
ST should try to beef up it's traditional consumer digital TV market instead of running behind the wireless arena which is already under consolidation phase.
Latest news I heard was that they were coming out with some cool chipsets with high performance ARM cores and graphics cores in the platform. Hope this can get them some much needed break.
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