ST-Ericsson reports first quarter 2011 financial results
(Thomson Reuters ONE) -
* Net sales $444 million
* Adjusted operating loss[1] $149 million
* New high-speed modem sales nearly doubled sequentially
Geneva, Switzerland, April 26, 2011 - ST-Ericsson, a joint venture of
STMicroelectronics (NYSE:STM) and Ericsson (NASDAQ:ERIC), reported financial
results for the first fiscal quarter ending April 2, 2011.
"Revenue in the first quarter reflected normal seasonal trends but declined more
than anticipated on a sequential basis due to a steeper drop in sales of our
legacy products, which is not yet offset by sales of new products. Primarily due
to these lower sales, our adjusted operating loss increased sequentially, said
Gilles Delfassy, ST-Ericsson president and CEO.
"However, revenue from new products as a percentage of the total revenue grew
again this quarter driven, for example, by sales of our high-speed Thor(TM) 21
megabits per second (Mbps) thin modems, which nearly doubled sequentially. We've
also made further inroads with customers on our NovaThor(TM) family of products
including the U8500 platform, which is on track.
"In the midst of these financial results, our main focus remains on improving
efficiency and securing the successful execution and delivery of our new
products to customers, which will drive the long term success of the company.
And I am pleased to say that seven of the top nine device manufacturers by
revenue are actively engaged with us here.
"We continue to believe in the direction we've set - to be a formidable leader
in the smartphone and tablet markets. The traction we have with customers helps
confirm these beliefs. We aim to serve these customers well and complete the
transition to our new product portfolio as quickly as possible."
2011 First quarter financial summary (unaudited)
$ million |Q1 2011|Q4 2010|Q1 2010
--------------------------------------------------+-------+-------+-------
Income Statement | | |
--------------------------------------------------+-------+-------+-------
NET SALES | 444| 577| 606
--------------------------------------------------+-------+-------+-------
OPERATING INCOME/(LOSS) ADJUSTED[1] for: | (149)| (119)| (114)
--------------------------------------------------+-------+-------+-------
- amortization of acquisition-related intangibles| (25)| (28)| (24)
--------------------------------------------------+-------+-------+-------
- restructuring charges | (4)| (24)| (27)
--------------------------------------------------+-------+-------+-------
OPERATING INCOME / (LOSS) as reported | (178)| (171)| (164)
--------------------------------------------------+-------+-------+-------
NET INCOME / (LOSS) | (178)| (177)| (154)
--------------------------------------------------+-------+-------+-------
$ million |Q1 2011|Q4 2010|Q1 2010
---------------------------------------------+-------+-------+-------
Net Financial Position | | |
---------------------------------------------+-------+-------+-------
Cash, cash equivalents & short-term deposits| 39| 68| 120
---------------------------------------------+-------+-------+-------
Parents' short-term credit facilities | (234)| (150)| 0
---------------------------------------------+-------+-------+-------
Net Financial Position[2] | (195)| (82)| 120
---------------------------------------------+-------+-------+-------
Additional financial information
The net financial position[2] at the end of the first quarter was negative $195
million. The sequential decrease was mainly due to the operating loss. During
the first quarter the company sold trade receivables without recourse, of which
$148 million were outstanding at the end of the quarter, representing a
sequential decrease of $18 million.
Inventory increased by $46 million, reaching $321 million at the end of the
first quarter, mainly due to the lower than expected sales during the quarter.
Outlook
For the second quarter 2011, ST-Ericsson expects net sales to decline
sequentially, primarily due to the ongoing decline in legacy products. The
impact of the Japan earthquake has been manageable to date; however, the company
will continue to monitor the supply chain situation.
Highlights - products, technology and wins announced in first quarter 2011
* Products
* Launched the NovaThor(TM) family, combining the most advanced
application processors (Nova(TM)) with the latest generation
of modems (Thor(TM))
* Launched the Igloo open source community and Snowball, the
most comprehensive developer board, to accelerate system and
software innovations on ST-Ericsson's Nova(TM) application
processor
* Customers
* Samsung selected the Thor(TM) M5720 modem to power its Samsung
Galaxy S(TM) 4G, the world's first 21 Mbps smartphone and 'T-
Mobile's Sidekick® 4G by Samsung'; both are running on T-
Mobile's US network
* Quanta Computer selected ST-Ericsson to power its LTE tablets
using the NovaThor(TM) platform
* Showcased a complete TD-LTE solution with voice service for
the first time, together with Ericsson and Sony Ericsson
* Design-win on Thor(TM) M5730 with Ericsson's new C5621gw and
H5321gw modules
* Operators
* Cooperation with Verizon Wireless on Thor(TM) 4G LTE modems to
support its 4G LTE mobile broadband network
* Demonstrated the feasibility of HSPA in 1800 MHz band with
Orange, Ericsson and Quanta Computer
Financial results appendix (unaudited)
2010 financial results by quarter
$ million |Q1 2010|Q2 2010|Q3 2010|Q4 2010
-----------------------------------------------+-------+-------+-------+-------
Income Statement | | | |
-----------------------------------------------+-------+-------+-------+-------
NET SALES | 606| 544| 565| 577
-----------------------------------------------+-------+-------+-------+-------
OPERATING INCOME/(LOSS) ADJUSTED[1] for: | (114)| (118)| (85)| (119)
-----------------------------------------------+-------+-------+-------+-------
- amortization of acquisition-related| | | |
intangibles | (24)| (25)| (25)| (28)
-----------------------------------------------+-------+-------+-------+-------
- restructuring charges | (27)| (5)| (19)| (24)
-----------------------------------------------+-------+-------+-------+-------
OPERATING INCOME / (LOSS) as reported | (164)| (148)| (129)| (171)
-----------------------------------------------+-------+-------+-------+-------
NET INCOME / (LOSS) | (154)| (139)| (121)| (177)
-----------------------------------------------+-------+-------+-------+-------
Footnotes
[1] The adjusted operating income/(loss) is defined as the operating
income/(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] Net financial position represents the balance between financial assets,
which comprise cash, cash equivalents and short-term deposits, and financial
debt which includes bank overdrafts and parent companies short-term bridge
credit facilities.
Notes to editors
ST-Ericsson invites journalists, analysts and investors to a conference call
scheduled on April 27 at 5 pm CET. 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 generated sales of $2.3 billion in
2010. 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.
www.stericsson.com
www.twitter.com/STEricssonForum
FOR FURTHER INFORMATION, PLEASE CONTACT:
Global Communications & Media Relations Investor & Analyst Relations
Carol Streitberger Brighton, Geneva, Fabrizio Rossini, Geneva, Switzerland
Switzerland Phone: +41 22 929 6973
Email: investor.relations(at)stericsson.com
Kristina Embring Klang, Lund, Sweden Public & Media Relations
Phone: +46 46 103 194 Roland Sladek, Geneva, Switzerland
Email:media.relations(at)stericsson.com Phone: +41 22 930 2733
Ericsson Investor Relations STMicroelectronics Investor Relations
Asa Konnbjer, Stockholm, Sweden Tait Sorensen, Phoenix AZ, US
Phone: +46 10 713 3928 Phone: +1 602 485 2064
Email:investor.relations(at)ericsson.com Celine Berthier, Geneva, Switzerland
Phone: +41 22 929 5812
Email:investors(at)st.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.
First quarter 2011 financial results:
http://hugin.info/1061/R/1509268/444084.pdf
This announcement is distributed by Thomson Reuters on behalf of
Thomson Reuters clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: Ericsson via Thomson Reuters ONE
[HUG#1509268]
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Datum: 26.04.2011 - 23:30 Uhr
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News-ID 53880
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