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STMicroelectronics Reports Profit In Q2 Despite Weak Revenues(dpa-AFX International Compact Via Acquire Media NewsEdge) GENEVA (dpa-AFX) - Swiss semiconductor company STMicroelectronics NV (STM) reported Wednesday a profit in its second quarter, compared to prior year's loss, boosted by margin strength, despite a decline in net revenues. Looking ahead, for the third quarter, the company expects revenues to increase about 3 percent on a sequential basis, plus or minus 3.5 percentage points. For the second quarter, net income attributable to parent company was $38 million, compared to prior year's loss of $152 million. Earnings per share was $0.04, compared to a net loss of $0.17 in the year-ago quarter. The latest quarter results included loss on equity-method investments of $44 million and impairment, restructuring and other charges of $20 million. Adjusted net income was $102 million or $0.11 per share in the second quarter, compared to a net loss of $53 million or $0.06 per share last year. The latest quarterly results also included $100 million related to the catch-up of funding of the Nano2017 R&D program, which was initiated in January 2013 and approved by the European Union in the second quarter. ST, in its role as Coordinator and Project Leader of Nano2017, has been allocated an overall funding budget of about 400 million euros for the period 2013-2017. Operating margin before impairment and restructuring was a positive 6.3 percent, compared to a negative 3.1 percent a year ago. Gross margin was 34 percent, 120 basis points higher than last year as a result of product, marketing and manufacturing initiatives, the company said. ST President and CEO Carlo Bozotti said, "Our performance benefited from the combination of favorable macro-economic and market dynamics, especially in Industrial and Automotive, and from the traction of our innovative portfolio and mass-market initiatives." Net revenues, meanwhile, declined 8.9 percent to $1.86 billion from $2.05 billion a year ago mainly due to the phase-out of legacy ST-Ericsson products. The prior year's net revenues included sales recorded by ST-Ericsson, which was deconsolidated on September 1, 2013. Both Analog & MEMS and Digital Convergence Group businesses reported weak results in the quarter. For the third quarter, the company expects gross margin to be about 34.4 percent, plus or minus 2.0 percentage points, based upon revenue growth outlook as well as product mix between analog and digital. Bozotti stated, "Excluding the second quarter one-time effect related to Nano2017, we anticipate further improvement in our operating margin in the third quarter, as we continue to progress step-by-step towards reaching our target financial model." On the NYSE, ST shares gained $0.23 or 2.52 percent on Tuesday, and settled at $9.35. In Paris, ST shares are currently trading at 6.84 euros, down 0.12 euros or 1.70 percent. Copyright RTT News/dpa-AFX |