STMicroelectronics Reports 2011 First Quarter Financial Results

- Net revenues up 9.0% year-over-year to $2.53 billion

- Gross margin up 140 basis points year-over-year to 39.1%

- Net income up year-over-year to $170 million

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2011-04-28 13:41

SEOUL--(뉴스와이어)--STMicroelectronics (NYSE: STM) reported financial results for the first quarter ended April 2, 2011.

President and CEO Carlo Bozotti commented, “Overall, ST had a solid start in 2011. Year-over-year, our revenues were particularly strong in automotive applications and in our Analog, MEMS, Microcontrollers and Power Discrete offerings. Our gross margin improved 140 basis points and our operating margin before restructuring attributable to ST reached 9.9%.*

(*)Operating margin before restructuring attributable to ST is a non-U.S. GAAP measure.

“Analog, MEMS and Microcontrollers revenues increased 38% year-over-year with broad contribution from its new product families. Power Discrete Products revenues increased 18% and Automotive, Consumer, Computer and Communication Infrastructure, mainly driven by strong demand in automotive, also increased 18%. Wireless revenues decreased 34% as sales of ST-Ericsson’s legacy products declined more than anticipated while the company is progressing in its portfolio transition and the expansion of its customer base.

“It is clear that our new products, well positioned on our targeted applications, are gaining traction and this makes us confident for 2011 as a whole, despite the short- term impact to the semiconductor industry’s supply chain due to the dramatic events in Japan. Our customer base is rapidly expanding as we are helping our customers to grow and take leadership positions in their businesses.”

First Quarter Review

ST’s net revenues increased 9.0% on a year-over-year basis, with regional growth led by Greater China-South Asia and the Americas with sales up 18% and 13%, respectively. On a sequential basis, ST’s net revenues decreased 10.5%, with declines in all regions. Sequential performances reflected expected seasonal patterns at ACCI, Analog, MEMS and Microcontrollers (AMM) and Power Discrete Products (PDP) as well as a stronger than anticipated decline at ST-Ericsson.

Gross margin increased 140 basis points compared to the year-ago quarter, principally reflecting higher volumes and manufacturing efficiencies that more than offset negative pricing trends. On a sequential basis, gross margin declined by 80 basis points and was penalized by a decrease in volume and prices partially offset by manufacturing efficiencies and product innovation.

Combined SG&A and R&D expenses were $874 million compared to $876 million and $914 million in the year-ago and prior quarter, respectively. Combined operating expenses, as a percentage of sales, were 34.5% in the 2011 first quarter compared to 37.7% and 32.3% in the year-ago and prior quarter, respectively.

Impairment and restructuring charges decreased to $24 million compared to $33 million and $32 million in the year-ago and prior quarter, respectively. At the end of the first quarter, ST closed its Phoenix, Arizona fab, thereby substantially completing the Company’s restructuring of manufacturing operations.

Operating margin before restructuring attributable to ST more than doubled in the 2011 first quarter compared to the year-ago quarter, principally reflecting higher revenues and product innovation. On a sequential basis, the operating margin before restructuring attributable to ST decreased principally due to lower revenues.*

(*)Operating income before restructuring, operating margin before restructuring and operating margin before restructuring attributable to ST are non-U.S. GAAP measures.

Net income increased significantly on a year-over-year basis to $0.19 per diluted share, compared to $0.06 per diluted share in the year-ago quarter. In the prior quarter earnings per diluted share were $0.24.

For the 2011 first quarter, the effective average exchange rate for the Company was approximately $1.33 to €1.00 compared to $1.34 to €1.00 for the 2010 fourth quarter and $1.39 to €1.00 for the 2010 first quarter.

Net Revenues by Market Segment

On a year-over-year basis, all market segments, except Telecom, posted growth, with Automotive up by 34%, Computer by 24%, Industrial & Other by 11% and Consumer by 2%. Telecom declined by 20%. Distribution increased 39%. Sequentially, all market segments declined, except Automotive, with Consumer lower by 11%, Industrial & Other by 7%, Computer by 8% and Telecom by 26%. Automotive was up by 1%. Distribution increased by 2%.

Revenues and Operating Results by ST Product Segment

Commencing January 1, 2011, the Company began reporting Industrial and Multisegment Sector (IMS) in two sub-segments. The first, Analog, MEMS and Microcontrollers (“AMM”) is comprised of all Analog products from the former product line Analog, Power and Micro-Electro-Mechanical Systems (“APM”), and the former product line Microcontrollers, non-flash, non-volatile Memory and Smart Card products (“MMS”). The second sub-segment is Power Discrete Products (“PDP”) comprised of Rectifiers, Thyristors, Triacs, Integrated Passive Active Devices (IPADs), and Transistors from the former product line APM.

ACCI (Automotive/Consumer/Computer/Communication Infrastructure Product Groups) first quarter net revenues increased 18% year-over-year, mainly driven by strong growth in Automotive. Sequentially, ACCI revenues were down 5%, reflecting a seasonal decline in Consumer and Computer partially offset by solid growth in Automotive. ACCI operating margin was 11.0% compared to 5.5% and 12.1% in the year-ago and prior period, respectively.

AMM (Analog, MEMS and Microcontrollers) first quarter net revenues increased 38% in comparison to the year-ago period on strong growth across all its product families, in particular MEMS. Sequentially, AMM revenues were lower by 4%. AMM operating margin was 22.0% in the 2011 first quarter, compared to 12.0% and 24.4% in the year-ago and prior quarter, respectively.

PDP (Power Discrete Products) first quarter net revenues increased 18% year-over-year, principally reflecting strong momentum in power MOSFETs and IGBTs. On a sequential basis, PDP revenues decreased 9%. PDP operating margin was 15.1% in the 2011 first quarter, compared to 9.1% in the year-ago period and 17.2% in the prior quarter.

Wireless net revenues in the first quarter decreased 34% year-over-year and 32% sequentially. Revenues in the first quarter reflected normal seasonal trends but declined more than anticipated due to a steeper drop in sales of ST-Ericsson’s legacy products and weak demand at a single customer. Wireless operating loss, excluding non-controlling interest, was $91 million in the first quarter compared to a loss of $47 million and $64 million in the year-ago and prior periods.

ST recorded $87 million of income in the first quarter of 2011 compared to $72 million and $83 million in the year-ago and prior quarter, respectively, of the non-controlling interest, mainly related to the ST-Ericsson joint venture. Non-controlling interest is posted below operating results in ST’s Consolidated Income Statement and reflects primarily Ericsson’s 50% share in the joint venture’s results, as consolidated by ST.

For additional information, see ST-Ericsson’s Q1 2011 earnings results press release at www.stericsson.com

Cash Flow and Balance Sheet Highlights

Free cash flow was $51 million in the first quarter compared to $176 million and $349 million in the year-ago and prior periods, respectively.*

(*)Free cash flow is a non-U.S. GAAP measure.

In the first quarter ST posted a gain of $21 million and realized net proceeds of $195 million from selling all remaining Micron shares and related unwound hedging instruments received in 2010 as a result of its final divestiture of the Flash memory business. ST has realized total net proceeds of $514 million from the sale of all Micron shares, the related unwound hedging instruments and the payment to the equity partner.

As anticipated, capital expenditures were $466 million during the first quarter of 2011 compared to $423 million and $179 million in the prior and year-ago quarters.

Inventory was $1.67 billion at quarter end compared to $1.50 billion at December 31, 2010, mainly due to the lower than expected wireless sales. In the first quarter inventory turns were 3.7.

On February 23, 2011, as holders were able to call for the redemption of ST’s outstanding 2016 Convertible Bonds, the Company paid $44 million to redeem a portion of its 2016 convertible bonds. In addition, the Company paid $30 million to repurchase a portion of its 2013 Eurobonds.

ST continued to maintain a strong net financial position with a net cash position of $1.14 billion at April 2, 2011 compared to $1.15 billion at December 31, 2010 and $566 million at March 27, 2010. ST’s cash and cash equivalents, short-term deposits, marketable securities (current and non-current) equaled $2.89 billion and total debt was $1.75 billion at April 2, 2011.*

Total equity was $8.84 billion, including non-controlling interest of $833 million at quarter end.

In the 2011 first quarter the Company posted a return on net assets (RONA) attributable to ST of 14.3%.*

Legal proceedings with respect to the collection of approximately $358 million due to ST by Credit Suisse pursuant to the FINRA award are continuing. We are awaiting the decision by the Court of Appeals of the Second Circuit which held a hearing on March 28, 2011 on Credit Suisse’s motion to oppose the enforcement of said award.

Second Quarter 2011 Business Outlook

Mr. Bozotti stated, “Following the March 11th earthquake in northern Japan, ST quickly moved to ensure the safety of its employees and their families and to help its customers and partners. We want to express our heartfelt concern for all those affected. As the situation evolves, we will continue to work closely with our customers to assist them in any way we can. While the impacts to date have been manageable from ST’s perspective, we remain vigilant and prepared to adjust to and support any shifts in demand or changes to the semiconductor supply-chain in the near-term.”

The Company expects second quarter 2011 revenues to evolve sequentially in the range of about -2% to +5% after taking into account ST-Ericsson’s anticipated sequential net sales decline. As a result, gross margin in the second quarter is expected to be about 38.7%, plus or minus 1 percentage point.

This outlook is based on an assumed effective currency exchange rate of approximately $1.37= €1.00 for the 2011 second quarter and includes the impact of existing hedging contracts. The second quarter will close on July 2, 2011.

STMicroelectronics Conference Call and Webcast Information

On April 27, 2011, the management of STMicroelectronics will conduct a conference call to discuss the Company’s performance for the first quarter of 2011.

The conference call will be held at 9:00 a.m. U.S. Eastern Time / 3:00 p.m. CET. The conference call will be available live via the Internet by accessing http://investors.st.com. Those accessing the webcast should go to the Web site at least 15 minutes prior to the call, in order to register, download, and install any necessary audio software. The webcast will be available until May 5, 2011.

About STMicroelectronics

STMicroelectronics is a global leader serving customers across the spectrum of electronics applications with innovative semiconductor solutions. ST aims to be the undisputed leader in multimedia convergence and power applications leveraging its vast array of technologies, design expertise and combination of intellectual property portfolio, strategic partnerships and manufacturing strength. In 2010, the Company’s net revenues were $10.35 billion. Further information on ST can be found at www.st.com.

ST마이크로일렉트로닉스 개요
ST마이크로일렉트로닉스는 혁신적인 반도체 솔루션을 다양한 전자 애플리케이션 분야의 고객들에게 제공하고 있는 세계적인 선도업체이다. ST는 자사의 방대한 기술, 설계 전문기술 및 IP 포트폴리오 통합, 전략적 협력업체와 강력한 제조시설 등을 활용하여 멀티미디어 컨버전스 및 전력 애플리케이션 분야에서 명실상부한 선도업체가 되는 것을 목표로 하고 있다. ST의 2010년도 매출은 103억 5,000만 달러이다. ST에 대한 보다 상세한 정보는 www.st.com를 참조하라.

웹사이트: http://www.st.com