Thursday, January 31, 2013

ST reports Q4-2012 and full year financial results

SWITZERLAND: STMicroelectronics reported financial results for the fourth quarter and full year ended December 31, 2012.

Fourth quarter net revenues totaled $2.16 billion and gross margin was 32.3 percent. Net loss attributable to parent company was $428 million, mainly due to a charge of $544 million for the impairment of Wireless goodwill and other intangible assets following the company’s decision to exit the ST-Ericsson joint venture after the communicated transition period as part of the Company’s new strategic plan announced on December 10, 2012.

President and CEO, Carlo Bozotti, said: “In the fourth quarter, revenue and gross margin results came in above the midpoint of our guidance despite the ongoing softness in the semiconductor market. We extended our leadership in key areas. Thanks to new product momentum, revenues from our wholly-owned businesses increased 0.2 percent and 1.6 percent on a sequential and year-ago basis driven by a very strong ramp of our MEMS products in the fourth quarter.

“Looking at 2012 overall, we improved our net financial position compared to 2011 despite the significant cash used by ST-Ericsson as well as the impact of weak business conditions. We were able to end the year with significant financial flexibility and strong cash balances while providing shareholders with the same level of dividend compared to 2011.

“Important decisions were made in 2012 that are shaping a new, more focused, higher-performing ST. In December, we announced our new strategic plan targeting leadership in two product segments: Sense & Power and Automotive Products and Embedded Processing Solutions. This new strategy includes a sharper focus on five growth drivers: MEMS and sensors, Smart Power, automotive products, microcontrollers, and application processors including digital consumer products.

"Importantly, from a financial model perspective, we are targeting an operating margin of 10 percent or more. A key component to achieving this objective is bringing our net operating expenses to an average quarterly rate in the range of $600 million to $650 million by the beginning of 2014.

“In connection with our strategic plan, we decided to exit ST-Ericsson after a transition period and our actions this past quarter, including the further impairment charge, are aligned with moving this decision forward.”

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