ST-Ericsson reports first quarter 2010 financial results
(Thomson Reuters ONE) -
· Net sales $606 million: 8% year-over-year increase pro-forma; 18%
sequential decrease
· Adjusted operating loss[1] $114 million
· Restructuring plans on track
Geneva, Switzerland, April 22, 2010 - ST-Ericsson, a joint venture of
STMicroelectronics (NYSE:STM) and Ericsson (NASDAQ:ERIC), reported financial
results for the first fiscal quarter ending March 27, 2010.
President and CEO, Gilles Delfassy, commented: "Sales in the quarter reflected
the short-term impact of the ongoing portfolio transition, as well as some
seasonality and the lower number of days in the fiscal period. Our restructuring
plans are well on track.
We have already taken significant steps towards achieving our planned
transformation and our new portfolio has been well received by our customers.
Our recently launched low-cost, Android(TM)-ready platform, the U6715, is
already shipping to Acer; we have announced a number of enhancements to our
smartphone offering, the U8500, and in TD-SCDMA we confirmed our leading
position, having delivered more than 10 million chipsets.
ST-Ericsson remains focused on its key priorities for 2010: achieving a
competitive cost structure, transitioning to the new portfolio and pursuing
profitable growth."
First quarter 2010 financial highlights (unaudited)
|Q1 2010|Q4 2009| Q1 2009
$ million | | |PRO-FORMA[2]
--------------------------------------------------+-------+-------+------------
Income Statement | | |
--------------------------------------------------+-------+-------+------------
NET SALES | 606| 740| 562
--------------------------------------------------+-------+-------+------------
OPERATING INCOME/(LOSS) ADJUSTED[1] for: | (114)| (50)| (149)
--------------------------------------------------+-------+-------+------------
- amortization of acquisition-related intangibles| (24)| (27)| (30)
--------------------------------------------------+-------+-------+------------
- restructuring charges | (27)| (62)| 0
--------------------------------------------------+-------+-------+------------
OPERATING INCOME / (LOSS) as reported | (164)| (139)| (179)
--------------------------------------------------+-------+-------+------------
NET INCOME / (LOSS) | (154)| (125)| NA
--------------------------------------------------+-------+-------+------------
Net sales decreased by 18 percent sequentially due to the impact of the on-going
portfolio transition, to seasonal effects as well as to the lower number of days
in the fiscal quarter.
The good traction of EDGE platforms and the continued momentum in TD-SCDMA
volume shipments were offset by a fast decline in certain legacy products.
The sequential change in operating loss mostly reflects lower sales, the effect
of the unfavorable product mix and the lower contribution from European funding
programs which positively impacted the previous quarter.
Inventory declined by $14 million, due to the continued control of the supply
chain, reaching a level of $230 million at the end of the quarter.
Net cash[3] was $120 million at the end of the first quarter 2010, with a
sequential decline of $109 million mainly due to the operating loss and to cash
outflows related to restructuring.
Update on restructuring plans
The restructuring plans, respectively, of $230 million announced on April
29, 2009 and of $115 million announced on December 3, 2009, are on track. By the
end of the quarter, approximately half of the total expected savings for the
$230 million plan were realized. The $115 million restructuring plan is expected
to contribute savings starting in the second half of 2010.
The R&D efficiency program has been initiated, with focus on common tools, IT
infrastructure and processes, and the company also completed the complex
integration of the IT systems.
Outlook
The company expects sequential net sales approximately flat with respect to the
first quarter 2010, due to the continued ongoing short-term impact of the
portfolio transition.
Given expected top line and based on the progression of the restructuring plans,
the company does not anticipate improvements of operating result to occur until
the second half of 2010.
Highlights - products, technology and wins
ST-Ericsson announced numerous enhancements to its advanced smartphone offering,
U8500:
it broke through smartphone performance barrier by reaching a dual-core
smartphone platform, with each core running at a clock speed of 1.2 GHz, and it
launched a family of single-chip 1080p high-definition multimedia interface
(HDMI) transmitters to enable streaming of high-definition multimedia content
from mobile devices to TVs.
Together with ARM, ST-Ericsson will enable support for Android(TM) on
next-generation multicore mobile platforms.
It has also launched a new low-cost, compact and very power-efficient
Android-ready platform, U6715, broadening the smartphone segment and bringing
these advanced and customizable handsets affordable for the mass-market.
ST-Ericsson's TD-SCDMA technology was selected by HTC for its smartphones in
China. The companies are developing both advanced mobile handsets, capable of
providing users with the ultimate multimedia mobile experience, and low-cost
models. The company also announced it will cooperate with China Mobile on TD-LTE
development.
In March, Sagem Wireless selected ST-Ericsson as its platform provider for
future Sagem Wireless devices, supporting a major part of the range of products
in its portfolio.
Financial results appendix (unaudited)
|Q1 2009| Q1 2009|Q2 2009|Q3 2009|Q4 2009
$ million | ACTUAL|PRO-FORMA[2]| | |
----------------------------------+-------+------------+-------+-------+-------
Income Statement | | | | |
----------------------------------+-------+------------+-------+-------+-------
NET SALES | 391| 562| 666| 728| 740
----------------------------------+-------+------------+-------+-------+-------
OPERATING INCOME/(LOSS) | | | | |
ADJUSTED[1] for: | (78)| (149)| (165)| (77)| (50)
----------------------------------+-------+------------+-------+-------+-------
- amortization of | | | | |
acquisition-related intangibles | (20)| (30)| (24)| (25)| (27)
----------------------------------+-------+------------+-------+-------+-------
- restructuring charges | 0| 0| (35)| (19)| (62)
----------------------------------+-------+------------+-------+-------+-------
OPERATING INCOME / (LOSS) as| | | | |
reported | (98)| (179)| (224)| (121)| (139)
----------------------------------+-------+------------+-------+-------+-------
NET INCOME / (LOSS) | (89)| NA| (213)| (112)| (125)
----------------------------------+-------+------------+-------+-------+-------
Footnotes
[1] The adjusted operating loss is defined as the operating loss reported before
amortization of acquisition-related intangibles and restructuring charges and is
used by management to help enhance the understanding of ongoing operations and
to communicate the impact of the items on the operating loss as reported.
[2] The unaudited pro-forma results are presented as if the ST-Ericsson joint
venture had been created on January 1, 2009 and incorporates the results of
ST-Ericsson and predecessors (ST-NXP Wireless and Ericsson Mobile Platforms)
beginning on that date (while effectively it started operations on February
2nd, 2009). Such results are presented for information purposes only and are not
indicative of the results of operations that would have been achieved had the
acquisition taken place as of January 1, 2009.
[3] Net cash is defined as cash and cash equivalents, marketable securities,
short term deposits less total debt.
Notes to editors
ST-Ericsson invites analysts and investors to a conference call scheduled on
April 23 at 4:45 p.m. CET/10:45 a.m. US Eastern Time. Call-in numbers, a live
webcast of the conference call as well as supporting slides will be available
atwww.stericsson.com/investors/investors.jsp
About ST-Ericsson
ST-Ericsson is a world leader in developing and delivering a complete portfolio
of innovative mobile platforms and cutting-edge wireless semiconductor solutions
across the broad spectrum of mobile technologies. The company is a leading
supplier to the top handset manufacturers and ST-Ericsson's products and
technologies enable more than half of all phones in use today. The company
generated pro-forma sales of about $2.7 billion in 2009. ST-Ericsson was
established as a 50/50 joint venture by STMicroelectronics (NYSE:STM) and
Ericsson (NASDAQ:ERIC) in February 2009, with headquarters in Geneva,
Switzerland. More information about ST-Ericsson is available
atwww.stericsson.com
FOR FURTHER INFORMATION, PLEASE CONTACT:
Global Communications & Media Investor & Analyst Relations
Relations
Claudia Levo, Geneva, Switzerland Fabrizio Rossini, Geneva, Switzerland
Jana Mancova, Geneva, Switzerland
Phone: +41 22 930 2733 Phone: +41 22 929 6973
Email: media.relations(at)stericsson.com Email: investor.relations(at)stericsson.com
Kristina Embring Klang, Lund, Sweden
Phone: +46 10 713 5058
Email: media.relations(at)stericsson.com
Ericsson Investor Relations STMicroelectronics Investor Relations
Susanne Andersson, Stockholm, Sweden Tait Sorensen, Phoenix AZ, US
Phone: +46 10 719 4631 Phone: +1 602 485 2064
Andreas Hedemyr, Stockholm, Sweden Celine Berthier, Geneva, Switzerland
Phone: +46 10 714 3748 Phone: +41 22 929 5812
E-mail: Email: investors(at)st.com
investor.relations(at)ericsson.com
###
The ST-Ericsson results reported in this press release do not reflect in their
entirety the results of the Wireless Segment of STMicroelectronics, which
include other activities that are not part of ST-Ericsson.
###
This press release contains forward-looking statements that involve inherent
risks and uncertainties. We have identified certain important factors that may
cause actual results to differ materially from those contained in such
forward-looking statements. For a detailed description of risk factors see
STMicroelectronics' (NYSE:STM) and Ericsson's (NASDAQ:ERIC) filings with the
US Securities and Exchange Commission, particularly each company's latest
published Annual Report on Form 20-F.
[HUG#1407225]
First quarter 2010 financial results: http://hugin.info/141758/R/1407225/360556.pdf
Unternehmensinformation / Kurzprofil:
Datum: 22.04.2010 - 23:06 Uhr
Sprache: Deutsch
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