STOCKHOLM, SWEDEN — (Marketwire) — 07/20/11 —
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 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 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.”
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.
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
at .
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.
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:
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]
FOR FURTHER INFORMATION, PLEASE CONTACT:
Global Communications & Media Relations
Carol Streitberger Brighton
Geneva, Switzerland
Investor & Analyst Relations
Fabrizio Rossini
Geneva, Switzerland
Phone: +41 22 929 6973
Email:
Kristina Embring Klang
Lund, Sweden
Phone: +46 46 103 194
Email:
Public & Media Relations
Roland Sladek
Geneva, Switzerland
Phone: +41 22 930 2733
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:
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