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ST-Ericsson reports fourth quarter 2011 financial results

GENEVA, SWITZERLAND — (Marketwire) — 01/23/12 —

Geneva, Switzerland, January 23, 2012 – ST-Ericsson, a joint venture of
STMicroelectronics (NYSE: STM) and Ericsson (NASDAQ: ERIC), reported
financial
results for the fourth fiscal quarter ending December 31, 2011.

Sales in the fourth quarter, excluding IP licensing to a third party, grew
1.3%
over prior quarter. The operating loss reported for the fourth quarter was
higher than the previous quarter.

Didier Lamouche, President and CEO, commented: “As the recently appointed
CEO of
ST-Ericsson, my aim, and that of the entire organization, will be to ensure
that
we meet all of our stakeholders- expectations. As we ramp up our new
product
portfolio and build a strong roadmap towards sustainable profitability, our
focus is to effectively deliver on timely execution of our strategic
programs
and continue to proliferate design wins.

From a financial perspective, it is clear that both sales and operating
results
will continue to be challenging over the coming quarters, due to the
reduction
in the short term of new product sales with one of our largest customers.
That
is why our immediate priority is to build a strong roadmap to profitability
based on enhancing execution, delivering in volume our leading products and
lowering the break-even point.”

2011 fourth quarter financial summary (unaudited)

Additional financial information

The net financial position[2]( )at the end of the fourth quarter was
negative
$798 million. The sequential decrease was mainly a consequence of the
operating
loss, partially mitigated by the reduction of working capital. Our
shareholders
will continue to support funding our transitional financial needs.

During the fourth quarter the company sold trade receivables without
recourse,
of which $144 million were outstanding at the end of the quarter,
representing a
sequential decline of $18 million.

Inventory decreased by $58 million reaching $223 million at the end of the
fourth quarter.

Outlook

For the first quarter 2012, ST-Ericsson expects a very significant
sequential
decline in net sales, resulting from a combination of higher inventory at
some
of our customers, further weakening of legacy product sales, the effect of
first
quarter seasonality as well as the reduction, in the short term, of new
product
sales with one of our largest customers.

Highlights – products, technology and wins announced in fourth quarter 2011

* Products

* The ST-Ericsson Thor M7400 modem was selected as a Consumer
Electronics Show Innovations 2012 Design and Engineering Awards
honoree
in the Embedded Technologies product category.

* Customers

* Sharp announced three new smartphones in Japan that are based on
the ST-
Ericsson Thor HSPA+ 21 Mbps thin modem.

* Nokia has selected the ST-Ericsson NovaThor platform for future
devices it plans to introduce based on the Windows Phone mobile
platform.

* The Motorola Atrix 2, launched in October, uses the ST-Ericsson
Thor
HSPA+ 21 Mbps thin modem.

* Partners/technology

* ST-Ericsson, in conjunction with STMicroelectronics, announced
their
involvement in the European VENTURI Project, a group of companies
that
will work together to develop mobile device platforms and
applications
that deliver fully-immersive mobile Augmented Reality experiences.

* ST-Ericsson and CEA-Leti, working with STMicroelectronics and
Cadence
Design Systems, have developed WIOMING, a three layer stack of
multi-
core system on chip (SoC) devices connected by the same network on
chip
(NoC). A proof of concept for a 3D multiprocessor architecture, the
WIOMING 3D stack uses Wide I/Os to connect the SoC devices and a
DRAM
memory chip.

Financial results appendix (unaudited)

Annual financial results

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 January 24 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 $1.7
billion in
2011. 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.

###

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.

Fourth Quarter 2011 financial results:

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#1579617]

FOR FURTHER INFORMATION, PLEASE CONTACT:
Global Communications & Media Relations
Claudia Levo, Geneva, Switzerland

Investor & Analyst Relations
Fabrizio Rossini, Geneva, Switzerland
Phone: +41 22 929 6973
Email:

Pamela McCracken, Santa Clara, U.S.A.
Phone: +1 408 398 8565
Email:media.relations@stericsson.com

Ericsson Investor Relations
Asa Konnbjer, Stockholm, Sweden
Phone: +46 10 713 3928
E-mail:

STMicroelectronics Investor Relations
Tait Sorensen, Phoenix AZ, US
Phone: +1 602 485 2064

Celine Berthier, Geneva, Switzerland
Phone: +41 22 929 5812
Email: