* Net sales $359 million
* Adjusted operating loss(1)) $148 million, reduced by half in two quarters
* Sequential improvements on all operating profit and loss metrics
Geneva, Switzerland, October 23, 2012 - ST-Ericsson, a joint venture of
STMicroelectronics (NYSE:STM) and Ericsson (NASDAQ:ERIC), reported financial
results for the third fiscal quarter ending September 29, 2012.
Sales in the third quarter increased 4 percent over the prior quarter reflecting
the continued ramp of NovaThor(TM) platform shipments as well as $35 million
revenues from IP licensing.
Adjusted operating loss decreased sequentially by $87 million to $148 million,
as the result of volume and margin improvements and of the actions to reduce
operating expenses.
Didier Lamouche, President and CEO of ST-Ericsson said: "In the third quarter,
we made further improvements on all the key metrics, thanks to our steady and
timely progress in executing the new strategic direction we set in April. The
ramp of our NovaThor integrated ModAp platforms continued with customers such as
Samsung, Sony Mobile Communications and new and existing Asian customers, with
new smartphones being brought to the market. Although our losses remain large,
we have succeeded in halving them in two quarters thanks to our progress in cost
reduction and productivity improvements. As we enter the fourth quarter and we
still have to face the further decline of the legacy portion of our business, we
are encouraged by new design wins on leading phones, like the recently announced
Samsung Galaxy S III mini, which is the twentieth device powered by our NovaThor
platform and brought to the market in about one year."
2012 third quarter financial summary (unaudited) *
$ million Q3 2012 Q2 2012 Q3 2011
Pro-forma Income Statement *
NET SALES 359 344 412
OPERATING INCOME/(LOSS) ADJUSTED(1)) for: (148) (235) (194)
- amortization of acquisition-related intangibles (19) (19) (25)
- restructuring charges (7) (56) (5)
OPERATING INCOME / (LOSS) as reported * (174) (309) (224)
Pro-forma NET INCOME / (LOSS) * (190) (318) (211)
-------------------------------------------------------------------------------
$ million Q3 2012 Q2 2012 Q3 2011
Additional financial data
Net financial position (2))
Cash, cash equivalents & short-term deposits/debt, net 39 33 20
Parent companies short-term debt (1390) (1238) (614)
Net financial position (1351) (1205) (594)
Net operating cash flow(3)) (146) (249) (149)
-------------------------------------------------------------------------------
*: No impairment test on Goodwill and Intangible Assets has been run in the
interim period. Consequently the Income Statement and certain of its metrics,
like Operating Income/(Loss) and Net Income/(Loss) are non-GAAP measures
Additional financial information
The net financial position(2) )at the end of the third quarter was negative
$1351 million.
Inventory increased by $9 million reaching $180 million at the end of the third
quarter.
Net operating cash flow was negative for $146 million at the end of the third
quarter, representing a $103 million sequential improvement.
Outlook
ST-Ericsson expects net sales to be approximately flat sequentially for the
fourth quarter 2012.
Highlights - products, technology and wins announced in the third quarter 2012
Customers
* Lenovo LePhone S899t smartphone - designed for China Mobile - is powered by
the
ST-Ericsson Nova(TM) A9500 application processor. This is the first
smartphone from Lenovo which is built on ST-Ericsson dual-core high-
performance application processor. In addition to the Nova A9500, ST-
Ericsson CG2900 and CW1100 connectivity solutions were also selected by
Lenovo enabling GPS, Bluetooth, FM and Wi-Fi features.
* ANT Wireless, a division of Dynastream Innovations Inc., announced the
newest addition to its ANT family of silicon solutions: the ST-Ericsson
CG2905 GNSS/Bluetooth/FM single chip device which embeds support of ANT.
* ST-Ericsson continues to expand cooperation with Chinese manufacturers on
NovaThor U8500 and its upgraded version the NovaThor U8520.
Products
* During the quarter both the NovaThor L8540 LTE ModAp platform and the FD-SOI
(Fully Depleted Silicon On Insulator) variant of this product were taped out
and sample wafer fabrication started. Samples of both products are expected
to be available during Q4.
Recent corporate developments
* The company has announced the appointment of Peter Oaklander as senior vice-
president for Sales & Marketing, reporting to president and CEO Didier
Lamouche.
Oaklander joins ST-Ericsson from Intersil, where he held positions as senior
vice president for global sales and of head of the power management
business; prior to that, he spent two decades in key sales and product
positions with Analog Devices, focusing primarily on Asian and US markets.
This appointment follows from a mutual decision between the company and
Pascal Langlois, ST-Ericsson's current head of sales, who will leave the
company during the fourth quarter.
Didier Lamouche commented: "We are re-aligning our sales efforts to take
into account the changed customer dynamics and our stronger focus going
forward on Asia and the US, with Europe remaining an important region for
our business. With his extensive experience on those markets and the
semiconductor industry, I am fully confident that Peter will bring a strong
contribution to our objective to continue to enlarge our customer base and
grow our business. Personally and also on behalf of the whole senior
management team, I want to thank Pascal Langlois for his contribution since
the inception of our company, where he has been instrumental in building the
sales team and broadening our customer base."
Financial results appendix (unaudited)
2011 financial results by quarter *
$ million Q4 2011 Q3 2011 Q2 2011 Q1 2011
Pro-forma Income Statement *
NET SALES 409 412 385 444
OPERATING INCOME/(LOSS) ADJUSTED(1)) for: (207) (194) (181) (149)
- amortization of acquisition-related
intangibles (25) (25) (25) (25)
- restructuring charges (9) (5) (15) (4)
OPERATING INCOME / (LOSS) as reported * (241) (224) (222) (178)
Pro-forma NET INCOME / (LOSS) * (231) (211) (221) (178)
-------------------------------------------------------------------------------
*: No impairment test on Goodwill and Intangible Assets has been run in the
interim period. Consequently the Income Statement and certain of its metrics,
like Operating Income/(Loss) and Net Income/(Loss) are non-GAAP measures
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 October 24, 2012 at 5:00 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
(NYSE:STM) and Ericsson (NASDAQ:ERIC) in February 2009, with headquarters in
Geneva, Switzerland.
www.stericsson.com
www.twitter.com/STEricssonForum
FOR FURTHER INFORMATION, PLEASE CONTACT:
Global Communications & Media Investor & Analyst Relations
Relations Fabrizio Rossini, Geneva, Switzerland
Claudia Levo, Geneva, Switzerland Phone: +41 22 929 6973
Email: investor.relations@stericsson.com
Nelly Dimey
Phone: +33 1 58 07 77 85
Email: media.relations@stericsson.com
Ericsson Investor Relations STMicroelectronics Investor Relations
Åsa Konnbjer, Stockholm, Sweden Tait Sorensen, Phoenix AZ, US
Phone: +46 10 713 3928 Phone: +1 602 485 2064
E-mail: Celine Berthier, Geneva, Switzerland
investor.relations@ericsson.com Phone: +41 22 929 5812
Email: investors@st.com
###
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.
[HUG#1651763]
