iNDEX
ST-Ericsson Reports Second Quarter 2012 Financial Results
FOR: ST-ERICSSON
JUL 17, 2012 - 17:02 ET
PLAN-LES-OUATES, SWEDEN--(Marketwire - July 17, 2012) -
* Net sales $344 million; 19 percent sequential increase
* Adjusted operating loss(1) $235 million; $62 million improvement over
prior
Quarter
* Transfer of application processor development organization finalized on
July
1
Geneva, Switzerland, July 17, 2012 - ST-Ericsson, a joint
venture of
STMicroelectronics (
Sales in the second quarter increased 19 percent over the prior quarter reflecting a significant ramp of volumes of NovaThor™ 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) -------------------------------------------------------------------------- $ million Q2 2012 Q1 2012 Q2 2011 Additional financial data 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™ 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.
Financial results appendix (unaudited)
Consolidated Balance sheet
June 30, 2012 December
In $ million 31, 2011
ASSETS
Current assets:
Cash and cash equivalents 33 9
Trade accounts receivable, net 50 97
Inventories, net 171 223
Deferred tax assets 10 8
Other receivables and
assets 113 102
------------------------
Total current assets 377 439
Goodwill 742 745
Other intangible assets,
net 378 437
Property, plant and equipment, net 316 364
Long-term deferred tax assets 218 188
Other investments and other non-current assets 26 70
------------------------
1,681 1,804
Total assets 2,058 2,243
------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term borrowings and current portion of long-term
debt 1,238 807
Trade accounts payable 176 175
Other payables and accrued liabilities 296 292
Deferred tax liabilities 0 0
Accrued income tax 7 8
------------------------
Total current liabilities 1,718 1,282
Reserve for pension and termination indemnities 94 87
Long-term deferred tax liabilities 4 3
Other non-current
liabilities 25 25
------------------------
123 115
Total liabilities 1,841 1,397
Total equity 217 846
------------------------
Total liabilities and equity 2,058 2,243
------------------------
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.
Notes to editors
ST-Ericsson invites journalists, analysts and investors to a conference
call
scheduled on July 18 at 12:00 pm (CET). Call-in numbers, a live webcast of
the
conference call, as well as supporting slides, will be available at
www.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
(
www.stericsson.com
www.twitter.com/STEricssonForum
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' (
Second quarter 2012 financial results: http://hugin.info/141758/R/1627442/520876.pdf
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Source: ST-Ericsson via Thomson Reuters ONE [HUG#1627442]
FOR FURTHER INFORMATION PLEASE CONTACT: 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: Email Contact Pamela McCracken, Santa Clara, U.S.A. Phone: +1 408 919 8743 Email: Email Contact Ericsson Investor Relations Asa Konnbjer, Stockholm, Sweden Phone: +46 10 713 3928 E-mail: Email Contact STMicroelectronics Investor Relations Tait Sorensen, Phoenix AZ, US Phone: +1 602 485 2064 Celine Berthier, Geneva, Switzerland Phone: +41 22 929 5812 Email: Email Contact