ST-Ericsson reports second quarter 2011 financial results
(Thomson Reuters ONE) -
* Net sales $385 million
* Adjusted operating loss(1)) $181 million
* Revenue from new products grew sequentially
Geneva, Switzerland, July 20, 2011 - ST-Ericsson, a joint venture of
STMicroelectronics (NYSE:STM) and Ericsson (NASDAQ:ERIC), reported financial
results for the second fiscal quarter ending July 2, 2011.
"The lower second quarter revenue was substantially in line with our
expectations," said Gilles Delfassy, president and CEO of ST-Ericsson. "In the
quarter we saw legacy product sales decline again sequentially contributing to a
wider operating loss; however, we saw revenue from new products grow over the
prior quarter, reaching about 45 percent of total sales.
"Our high-speed Thor(TM) modem revenue grew more than 20 percent sequentially as
new HSPA+ phones continued to ramp in the market. Also in the quarter we
delivered first samples of our Thor M7400 LTE modem and conducted field trials
on our NovaThor(TM) U8500 platform with several customers. We are very pleased
with our increasing progress on the NovaThor U8500, although initial volumes
will be somewhat lower due to reduced demand at certain customers.
"We continue to be encouraged by the traction we have with industry-leading
customers on our new platforms; however, we are keenly aware of our current
financial situation. As announced in June, we are taking additional actions
aimed at reducing costs while not compromising the execution of our new products
and delivery to customers.
"While the present financial situation is very tough, we are on track to
complete the transition to our new product portfolio in order to realize our aim
of profitable leadership in this market."
2011 second quarter financial summary (unaudited)
$ million |Q2 2011|Q1 2011|Q2 2010
--------------------------------------------------+-------+-------+-------
Income Statement | | |
--------------------------------------------------+-------+-------+-------
NET SALES | 385| 444| 544
--------------------------------------------------+-------+-------+-------
OPERATING INCOME/(LOSS) ADJUSTED(1)) for: | (181)| (149)| (118)
--------------------------------------------------+-------+-------+-------
| | |
- amortization of acquisition-related intangibles| (25)| (25)| (25)
--------------------------------------------------+-------+-------+-------
- restructuring charges | (15)| (4)| (5)
--------------------------------------------------+-------+-------+-------
OPERATING INCOME / (LOSS) as reported | (222)| (178)| (148)
--------------------------------------------------+-------+-------+-------
NET INCOME / (LOSS) | (221)| (178)| (139)
--------------------------------------------------+-------+-------+-------
$ million |Q2 2011|Q1 2011|Q2 2010
----------------------------------------------+-------+-------+-------
Net Financial Position²())() | | |
----------------------------------------------+-------+-------+-------
Cash, cash equivalents & short-term deposits | 18| 39| 43
----------------------------------------------+-------+-------+-------
Parent companies short-term credit facilities| (445)| (234)| 0
----------------------------------------------+-------+-------+-------
Net Financial Position²()) | (427)| (195)| 43
----------------------------------------------+-------+-------+-------
Additional financial information
The net financial position at the end of the second quarter was negative $427
million. The sequential decrease was mainly due to the operating loss. During
the second quarter the company sold trade receivables without recourse, of which
$179 million were outstanding at the end of the quarter, representing a
sequential increase of $31 million. Inventory decreased by $3 million, reaching
$318 million at the end of the quarter.
Outlook
For the third quarter 2011, ST-Ericsson expects net sales to be about flat
sequentially, reflecting increased revenue from new products offset by lower R&D
services sales for advanced modem development and a continued decline in legacy
product sales.
Highlights - products, technology and wins announced in second quarter 2011
* Products
* Launched the Thor M5780 21Mbps, tailored for smartphones and 30 percent
smaller compared to previous modem solutions.
* Customers
* As of the end of first quarter, Ericsson had approximately 100 design
wins for notebooks and netbooks and 25 design wins for tablets with
modules using ST-Ericsson modems, with the majority based on the Thor
M57xx 21Mbps family
* Samsung selected the Thor M5720 modem to underpin the Samsung Infuse(TM)
4G smartphones launched with AT&T in the US
* In June T-Mobile USA introduced the Samsung Exhibit(TM) 4G which is
underpinned by ST-Ericsson's 21Mbps Thor modem
* All new Panasonic Toughbook(TM) computers will feature Ericsson's mobile
broadband module, based on the ST-Ericsson Thor 21Mbps modem.
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 July 21 at 5pm 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
E-mail: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.
Second quarter 2011 financial results:
http://hugin.info/1061/R/1532463/466651.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#1532463]
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Datum: 20.07.2011 - 22:30 Uhr
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