ST-Ericsson reports second quarter 2009 financial results
(Thomson Reuters ONE) - * Net sales $666 million; 18.5% sequential increase * Adjusted operating loss[1] $165 million * Strong momentum in China with leading customers * New organization announced to accelerate execution of new product strategyGeneva, Switzerland, July 23, 2009 - ST-Ericsson, a joint venture ofSTMicroelectronics (NYSE:STM) and Ericsson (NASDAQ:ERIC), reportedfinancial results for the second quarter 2009.President and CEO, Alain Dutheil, commented: "During the secondquarter our sales performed above normal seasonal patterns. This wasdue to the destocking phase in the channels being over, to thepick-up of demand in China, and to our steady execution on ourcommitments towards our customers.We have kept a strong focus on our restructuring and realignmentplans. The $250 million cost synergies program, defined by ST-NXPWireless in the third quarter 2008, is expected to be completed byyear-end according to schedule. The new restructuring plan of $230million cost synergies, announced at the end of April, has beeninitiated and is expected to be completed by the second quarter 2010.Today we have also announced our new organization, aligned to ourproduct strategy, to further strengthen our technological leadershipand complete the integration."Financial highlights (unaudited)+-------------------------------------------------------------------+| | Q2 2009 | Q1 2009 | Feb-March | Q2 || | | PRO- | 2009[2] | 2008 || | | FORMA | | PRO- || $ millions | | | | FORMA ||---------------------------+---------+---------+-----------+-------|| Income Statement | | | | ||---------------------------+---------+---------+-----------+-------|| NET SALES | 666 | 562 | 391 | 966 ||---------------------------+---------+---------+-----------+-------|| OPERATING INCOME/(LOSS) | | | | || ADJUSTED for: | (165) | (149) | (78) | (69) ||---------------------------+---------+---------+-----------+-------|| - amortization of | | | | || acquisition-related | | | | || intangibles | (24) | (30) | (20) | (25) ||---------------------------+---------+---------+-----------+-------|| - restructuring charges | (35) | 0 | 0 | 0 ||---------------------------+---------+---------+-----------+-------|| OPERATING INCOME / (LOSS) | | | | || as reported | (224) | (179) | (98) | (94) ||---------------------------+---------+---------+-----------+-------|| NET INCOME / (LOSS) | (213) | NA | (89) | NA |+-------------------------------------------------------------------+Financial results based on US GAAPNet sales in the second quarter were higher than normal seasonalpatterns and showed a progress of 18.5% compared to first quarter2009 pro-forma sales. This was mainly due to the higher demand inChina - driven by TD-SCDMA- and in the rest of Asia-Pacific and tothe alignment of inventory to demand levels across the handset supplychain.The $165 million operating loss, excluding amortization ofacquisition-related intangibles and restructuring charges, comparesto a $149 million operating loss in the first quarter 2009 pro-formaand it includes approximately $20 million of non-recurring itemslinked to the start-up of the company.Inventory declined sequentially by $109 million reaching $325 millionat the end of the second quarter 2009, reflecting a tight control ofthe supply chain.Net cash[3] was $326 million at the end of second quarter 2009.Update on restructuring plansThe $250 million cost synergies program defined by ST-NXP Wireless inthe third quarter 2008 is in line with plans. The program envisaged aworkforce reduction of 500 worldwide.The $230 million restructuring plan announced on April 29 has beeninitiated. The associated restructuring charges were $35 million forthe second quarter 2009. The plan envisages a reduction in workforceof 1,200 worldwide, upon completion of negotiations and consultationswith Work Councils and employee representatives that have alreadystarted in all affected sites and organizations.Market evolution"While more normal seasonal market trends are likely to be confirmedin the next quarter, primarily driven by Asia, including China, thebusiness environment remains uncertain in the medium term," saidAlain Dutheil. "We will continue to drive the execution of ourrealignment and restructuring plans with a strong focus on providingour customers with solutions spanning across all existing andnext-generation access technologies."Q2 2009 highlights - products, technology and winsIn May, ST-Ericsson announced a strategic partnership with ChinaMobile to drive development of both high-end and low-cost handsets,based on 3G standard TD-SCDMA. Within this agreement, ST-Ericssonwill also support four of its customers to commercialize their mobilephones during 2009-2010.In June, the company strengthened its partnership with Samsung byproviding an innovative platform for its first high-end TD-SCDMA/EDGEdevice for China's mobile broadband market.The company also announced mass production of its highly integratedRF transceiver solution to reduce cost and system footprint in 3Ghandsets. ST-Ericsson's Aero4228 solution eliminates the need forexpensive external filter components typically required to completetoday's mobile handset designs.Footnotes[1] The adjusted operating loss is defined as the operating lossreported before amortization of acquisition-related intangibles andrestructuring charges and is used by management to help enhance theunderstanding of ongoing operations and to communicate the impact ofthe items on the operating loss as reported.[2] First quarter 2009 actual results, which include only two monthsof operations, February and March, as the ST-Ericsson joint-venturestarted operations on February 2, 2009.[3] Net cash is defined as cash and cash equivalents, marketablesecurities, short term deposits less total debtNotes to editorsST-Ericsson invites media to a conference call at 9.30 A.M. CET andanalysts and investors to a conference call at 2:00 P.M. CET.Call-in numbers and live webcasts of the conference calls as well assupporting slides will be available athttp://www.stericsson.com/investors/investors.jsp.About ST-EricssonST-Ericsson is a world leader in developing and delivering a completeportfolio of innovative mobile platforms and cutting-edge wirelesssemiconductor solutions across the broad spectrum of mobiletechnologies. The company is a leading supplier to the top handsetmanufacturers and ST-Ericsson's products and technologies enable morethan half of all phones in use today. The company generatedpro-forma sales of about $3.6 billion in 2008. ST-Ericsson wasestablished as a 50/50 joint venture by STMicroelectronics (NYSE:STM)and Ericsson (NASDAQ:ERIC) in February 2009, with headquarters inGeneva, Switzerland. More information about ST-Ericsson is availableat www.stericsson.com.FOR FURTHER INFORMATION, PLEASE CONTACT:Global Communications & Media Investor RelationsRelationsClaudia Levo, Geneva, Fabrizio Rossini, Geneva, SwitzerlandSwitzerlandJana Mancova, Geneva,SwitzerlandPhone: +41 22 930 2733 Phone: +41 22 929 6973Email: Email: investor.relations(at)stericsson.commedia.relations(at)stericsson.comKristina Embring Klang, Lund,SwedenPhone: +46 10 713 5058Email:media.relations(at)stericsson.comEricsson Investor Relations STMicroelectronics Investor RelationsGary Pinkham, Stockholm, Sweden Tait Sorensen, Phoenix AZ, USPhone: +46 10 719 0858 Phone: +1 602 485 2064Susanne Andersson, Stockholm, Celine Berthier, Geneva,Sweden SwitzerlandPhone: +46 10 719 4631 Phone: +41 22 929 5812Andreas Hedemyr, Stockholm, Sweden Email: investors(at)st.comPhone: +46 10 404 3748E-mail: investor.relations(at)ericsson.com ###The ST-Ericsson results reported in this press release do not reflectin their entirety the results of the Wireless Segment ofSTMicroelectronics, which include other activities that are not partof ST-Ericsson. STMicroelectronics will disclose its results for thesecond quarter on July 28, 2009. ###This press release contains forward-looking statements that involveinherent risks and uncertainties. We have identified certainimportant factors that may cause actual results to differ materiallyfrom those contained in such forward-looking statements. For adetailed description of risk factors see STMicroelectronics'(NYSE:STM) and Ericsson's (NASDAQ:ERIC) filings with the USSecurities and Exchange Commission, particularly each company'slatest published Annual Report on Form 20-F.http://hugin.info/1061/R/1330457/314509.pdfThis announcement was originally distributed by Hugin. The issuer is solely responsible for the content of this announcement.
Datum: 23.07.2009 - 07:00 Uhr
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