ST reports 2009 Q4 and full year financial results

PARIS, FRANCE: STMicroelectronics reported financial results for the 2009 fourth quarter and full year ended December 31, 2009.

President and CEO Carlo Bozotti commented: “ST’s fourth quarter financial results reflect a positive finish to a very difficult year for ST, the semiconductor industry and the global economy.

“Our fourth quarter net revenues increased 13.6 percent sequentially, above our outlook range and our gross margin came in at 37 percent, above the midpoint of our outlook range. Excluding restructuring charges, ST returned to an operating income of $90 million for the quarter.

“The Company’s stronger than forecasted quarterly sequential revenue performance was thanks to growth in all regions and market segments, with all segments, except telecom, posting double-digit growth.

“Despite the challenging economic environment, ST made significant progress over the course of 2009 by successfully delivering on key actions announced earlier in the year. First, we protected and then enhanced our cash position, improving our net financial position by $965 million to end the year with a net cash position of $420 million. Second, we made excellent progress in lowering our cost base with a $1 billion savings plan to be completed by about mid-2010. As a result, we improved our financial performance having generated, as anticipated, some points of operating margin and net operating cash flow equal to 8.6% of sales despite an unfavorable currency environment.

“2009 has been a year of severe losses for ST but we are encouraged by the progress we made throughout the year. 2010 will be a year of great opportunities for ST. Our efforts to strengthen our product portfolio will allow us to grow organically and to participate in new markets and the completion of our major restructuring program will continue to substantially improve our cost structure and competitiveness.”

Q1 2010 business outlook
Bozotti stated: “We started the first quarter with a solid backlog and we are working to serve our customers’ demand. In-line with historical trends, we expect to register a sequential net revenue decrease between about -7 percent and -13 percent, which equates to a positive 35 percent to 45 percent when compared to the year-over-year period. However, we expect a better than historical evolution in our gross margin to about 37.5 percent, plus or minus 1 percentage point thanks to better manufacturing loading and efficiency and an improved product mix.

“Looking forward, we believe ST is well positioned to benefit from the industry upturn because of the important work we have done in product and technology innovation. We plan to deliver the benefits of our innovation to our customers and we also expect ST-Ericsson to execute on its plan to transition to the new portfolio strategy they have devised for their next generation offering.

“ST’s recent design-wins for digital consumer platforms, ASICs, and automotive products and our many promising offerings including 32-bit microcontrollers, MEMS, with our new families of gyroscopes and active microphones, and low-power sensors for healthcare and building automation applications support our efforts to continuously improve our product portfolio.

“In summary, we are excited about the many opportunities ahead of us. While we continue to make solid progress on reducing our cost structure, our innovative product portfolio is positioning us well to achieve sustainable profitability and cash flow generation.”