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Wednesday 29 April, 2009

ST-Ericsson

ST-Ericsson reports financial results[1] for it...





  * 50/50 joint venture between Ericsson and STMicroelectronics
    started operations on February 2nd 2009, creating a new
    wireless-semiconductor industry leader
  * Net sales $391 million
  * Operating loss $98 million
  * $230 million of annualized savings expected from a new program of
    resources and operations re-alignment to reflect outcome of the
    integration as well as current unfavorable business environment
  * Continuous focus on innovation and strengthening of strategic
    partnerships with customers since the launch of the company in
    February 2009


Geneva - Switzerland -April 29,  2009 - ST-Ericsson, a joint  venture
of  STMicroelectronics  (NYSE:   STM)  and  Ericsson   (NASDAQ:ERIC),
reported financial results for its first two months of operation from
February 2nd 2009.

President and CEO Alain Dutheil commented: "Our sales development  in
the quarter reflects the broad-based  economic downturn that has  led
to weaker  consumer  demand for  handsets  and put  pressure  on  the
overall wireless semiconductor industry.
Even in such a challenging climate, during the first quarter of  2009
we confirmed our number  two position in the  market, we renewed  our
focus on  innovation and  we strengthened  our partnership  with  key
customers.
We were the  first to  consolidate in  our industry,  creating a  new
global leader in  wireless platforms and  semiconductors, and we  are
currently executing on an alignment of our operations that will allow
us to shape the  long term success of  the company, while creating  a
sustainable cost structure for the short and medium term.
A more efficient and integrated product strategy, based on the future
convergence of  our 3G  roadmap and  on our  continued commitment  on
2G/EDGE  and  connectivity,  as  well  as  a  strong  focus  on  next
generation access technologies,  will help us  achieve our short  and
long term objectives and continue  to offer our customers a  complete
and innovative portfolio of solutions."

FINANCIAL HIGHLIGHTS

First Quarter 2009 actual (Feb 2 - March 28 2009)


+--------------------------------------------+
| $ millions              | Feb - March 2009 |
|-------------------------+------------------|
| Income Statement        |                  |
|-------------------------+------------------|
| NET SALES               |       391        |
|-------------------------+------------------|
| OPERATING INCOME/(LOSS) |      (98)   [2]  |
|-------------------------+------------------|
| NET INCOME/(LOSS)       |       (89)       |
+--------------------------------------------+


Net sales  in the  two months  of operations  reflected the  economic
downturn that led  to weaker  consumer demand  especially in  Europe,
mainly in the feature phones segment, reinforced by overall inventory
reduction in the handset supply chain.
The operating loss of $98 million was a consequence both of the level
of sales  and  of price  pressure  on margins,  partially  offset  by
already planned reductions in operating expenses related to the  cost
synergies program previously announced by ST-NXP Wireless in November
2008. Net cash [3] was $358 million at the end of Q109.

Alignment of operations and resources
A restructuring plan is being launched for immediate execution and is
due to be  completed by  the second quarter  of 2010.   This plan  is
incremental to the $250 million  cost synergies program announced  by
ST-NXP Wireless in November 2008.
Annualized savings of the new  restructuring plan are expected to  be
approximately $230 million upon completion.  Restructuring costs  are
estimated in the range of $70 - 90 million, of which the majority  is
expected to be recorded during the second quarter of 2009.

The main assumptions of the restructuring plan are: a re-alignment of
product roadmaps  to  create a  more  agile and  cost  efficient  R&D
organization; and  a reduction  in workforce  of 1,200  worldwide  to
reflect further integration  activities following  the merger,  lower
sales  volumes  and  limited  visibility  on  the  timing  of  market
recovery.

Market evolution
"In view of the  continued uncertainty of the  global economy and  in
accordance with  published industry  forecasts,  we see  a  continued
challenging 2009 for our industry" said Alain Dutheil.  "However,  we
believe that the destocking phase  is substantially over, even if  we
have yet  to see  signs of  a broad-based  pick-up of  demand in  our
industry".


Q1 2009 Highlights- Products, Technology and Wins
In February 2009 the company announced its cooperation with Nokia  to
provide a Next-Generation Smartphone Platform for Symbian Foundation,
with a reference platform based on ST-Ericsson's U8500 single chip.
Also in February the company announced its collaboration with ARM  to
demonstrate the  world's  first  Symmetric  Multi  Processing  mobile
platform technology running on Symbian OS.
In March, the company launched fully integrated single-chip solutions
for feature-rich, low-cost handsets. ST-Ericsson's 4910 and 4908 EDGE
platforms combine  the industry's  highest level  of integration  and
cost-efficiency,  with  both   digital  and   analog  basebands,   RF
transceiver and power management unit (PMU) in a single chip.
A next-generation mobile audio digital-to-analog converter (DAC)  for
the mobile  music market  was  also launched.  ST-Ericsson's  STw5211
further extends the company's wide portfolio of audio solutions  with
enhanced performance.


PRO-FORMA INFORMATION[4]


+-----------------------------------------------------------------------+
|                     |  Q1 09  |  Q4 08  |  Q3 08  |  Q2 08  |  Q1 08  |
|                     |Pro-forma|Pro-forma|Pro-forma|Pro-forma|Pro-forma|
|---------------------+---------+---------+---------+---------+---------|
|      NET SALES      |   562   |   746   |  1,003  |   966   |   862   |
|---------------------+---------+---------+---------+---------+---------|
|  OPERATING INCOME/  |  (179)  |  (127)  |  (59)   |  (94)   |  (121)  |
|       (LOSS)        |         |         |         |         |         |
+-----------------------------------------------------------------------+



-ENDS-

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 ST-Ericsson's products and technologies enable more
than half of all  phones in use today.   The global company of  8,000
people generated pro-forma sales of  about USD 3.6 billion in  2008.
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.   More
information about ST-Ericsson is available at www.stericsson.com.



FOR FURTHER INFORMATION, PLEASE CONTACT:
Global Communications & Media  Investor Relations
Relations
Claudia Levo, Switzerland,     Fabrizio Rossini, Switzerland,Geneva
Geneva
Phone: +41 22 930 2750         Phone: +41 22 929 6973
Email:                         Email: [email protected]
[email protected]

Kristina Embring Klang,
Sweden, Lund
Phone : +46 10 7135058
Email:
[email protected]


Ericsson
Susanne Andersson , Sweden, Stockholm
Phone: +46 10 719 4631
Gary Pinkham, Sweden, Stockholm
Phone: +46 10 719 0858
Andreas Hedemyr, Sweden, Stockholm
Phone: +46 10 404 3748
E-mail: [email protected]

STMicroelectronics
Tait Sorensen, US, Phoenix AZ
Phone: +1 602-485-2064
Celine Berthier, Switzerland, Geneva
Phone: +41 22 929 5812
Email: [email protected]


                                 ###
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.


[1] The reported financial results are based on US GAAP.
[2]  Operating Loss  reported after  :

amortization of acquisition-related intangibles &      $(11) million
software capitalization
restructuring charges                                  $   0  million
Total                                                  $(11) million


[3] Net cash is defined as cash and cash equivalents, marketable
securities, short term deposits less total debt.
[4] The unaudited pro-forma results are presented as if the
ST-Ericsson joint venture had been created on January 1, 2008 and
incorporates the results of ST-Ericsson and predecessors (ST-NXP
Wireless and Ericsson Mobile Platforms) beginning on that date (while
effectively it started operations on February 2nd, 2009). Such
results are presented for information purposes only and are not
indicative of the results of operations that would have been achieved
had the acquisition taken place as of January 1, 2008. Pro-forma
results do not include inventory step-up and write-off of IP R&D for
a total value of $166M in Q3 and $39M in Q4.


This announcement was originally distributed by Hugin. The issuer is 
solely responsible for the content of this announcement.




          

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