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| Wednesday, 18 July 2012, 13:00 HKT/SGT | |
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Source: ST-Ericsson | |
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GENEVE, CH, July 18, 2012 - (ACN Newswire) - ST-Ericsson, a joint venture of STMicroelectronics (NYSE:STM) and Ericsson (NASDAQ:ERIC), reported financial results for the second fiscal quarter ending June 30, 2012.
-- Net sales $344 million; 19 percent sequential increase
-- Adjusted operating loss1) $235 million; $62 million improvement over prior quarter
-- Transfer of application processor development organization finalized on July 1
Sales in the second quarter increased 19 percent over the prior quarter reflecting a significant ramp of volumes of NovaThor(TM) platforms shipping to our major customers. Adjusted operating loss decreased sequentially by $62 million to $235 million, as the result of volume and margin improvements due to new platforms and the first steps of the ongoing actions to reduce operating expenses.
Didier Lamouche, President and CEO of ST-Ericsson said: "This has been a quarter of progress across the board. We ramped our NovaThor ModAp platform with Samsung and Sony Mobile Communications and also added several new Chinese key players. We are executing in a timely manner our new strategic plan to reposition our whole business model and we finalized on July 1, as anticipated, the transfer of the application processors development team to STMicroelectronics to build a world class partnership.
We are advancing towards our objective to reduce our breakeven point and to reach sustainable profitability. During the quarter, all profit and loss metrics showed a sequential improvement: from revenue growth to gross margin expansion and from expense reduction to the decrease of our operating loss. While these indicators are encouraging, we recognize that further improvements in the execution of our critical programs are needed. Moreover, we operate in a very dynamic, fast-changing market and a highly competitive environment. In this context our primary focus is on delivering improvements of operating results and cash flow."
2012 second quarter financial summary (unaudited)
$ million Q2 2012 Q1 2012 Q2 2011
Income Statement
NET SALES 344 290 385
OPERATING INCOME/
(LOSS) ADJUSTED[1] for: (235) (297) (181)
- amortization of
acquisition-related intangibles (19) (19) (25)
- restructuring charges (56) (10) (15)
OPERATING INCOME/
(LOSS) as reported (309) (326) (222)
NET INCOME / (LOSS) (318) (312) (221)
Net financial position [2]
Cash, cash equivalents &
short-term deposits/debt, net 33 22 18
Parent companies short-term debt (1238) (978) (445)
Net financial position (1205) (956) (427)
Net operating cash flow[3] (249) (159) (233)
Additional financial information
The net financial position[2] at the end of the second quarter was negative $1205 million.
Inventory decreased by $38 million reaching $171 million at the end of the second quarter.
Outlook
Given, on one hand, the very substantial revenue growth during the second quarter and, on the other hand, the macro-economic and industry environment, ST-Ericsson expects net sales to be approximately flat sequentially for the third quarter 2012.
Highlights - products, technology and wins announced in the second quarter 2012
Customers
- Samsung continues to incorporate the ST-Ericsson NovaThor ModAp platforms into their award-winning Samsung GALAXY smartphone line with the announcement of the Samsung GALAXY Beam and Samsung GALAXY Ace 2.
- China Unicom and Yulong are now customers of the NovaThor platform. The NovaThor U8500 ModAp platform powers the new Coolpad Cheer CP7728.
- The Xperia(TM) go smartphone became the fourth phone this year from Sony Mobile Communications to leverage the ST-Ericsson NovaThor platform.
- The Shanda Bambook smartphone - the first from the China-based company - is powered by the ST-Ericsson NovaThor U8500 ModAp solution. It is the first of several smartphones planned by Shanda to use the ST-Ericsson NovaThor platform.
- Two new Panasonic ELUGA devices for the Japanese market are powered by the compact yet power efficient Thor M5780 thin modem.
- A new Sharp AQUOS smartphone is based on the power efficient ST-Ericsson Thor M5730 and available now in Japan.
Partners/technology
- STMicroelectronics secured additional sourcing for 28nm and 20nm FD-SOI Technology with GLOBALFOUNDRIES. ST-Ericsson selected ST FD-SOI technology for use in its future mobile platforms, which will enable enhanced performance from the ST-Ericsson NovaThor platform with much less battery usage.
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.
[3] Net operating cash flow is defined as net cash from operating activities, less capital expenditure and less restructuring charges.
Contact:
Global Communications & Media Relations
Claudia Levo, Geneva, Switzerland
Email: media.relations@stericsson.com
Investor & Analyst Relations
Fabrizio Rossini, Geneva, Switzerland
Phone: +41 22 929 6973
Email: investor.relations@stericsson.com
Topic: Earnings
Source: ST-Ericsson
Sectors: Daily Finance, Wireless, Apps
https://www.acnnewswire.com
From the Asia Corporate News Network
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