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STMicroelectronics Adj. Earnings Beat Estimates, But Revenues Miss; Warns On Q4(dpa-AFX International Compact Via Acquire Media NewsEdge) GENEVA (dpa-AFX) - Swiss semiconductor company STMicroelectronics NV (STM) Wednesday reported a profit for the third quarter compared with loss last year, helped by margin expansion. Net revenues declined about 6 percent, reflecting mainly phase-out of ST-Ericsson products. Adjusted earnings beat analysts' expectations, while revenues missed view. Looking ahead, the company sees revenue decline in the fourth quarter due to the ongoing soft market conditions. For the third quarter, net income attributable to the parent company was $72 million or $0.08 per share, compared with a net loss of $142 million or $0.16 per share a year earlier. Adjusted earnings totaled $0.13 per share, while the firm posted a net loss of $0.03 per share last year. Three analysts polled by Thomson Reuters expected the company to earn $0.05 per share for the quarter. Analysts' estimates typically exclude one-time items. Operating income was $37 million, compared to an operating loss of $66 million in the prior year. Excluding impairment and restructuring charges, adjusted operating income increased to $75 million from $54 million last year. Net revenues for the quarter declined 6.3 percent to $1.89 billion from $2.01 billion last year, and came below the $1.92 billion Wall Street expected. Prior-year revenues included sales from ST-Ericsson, which was deconsolidated on September 1, 2013. Sense & Power and Automotive Products, or SP&A revenues edged up 1 percent to $1.22 billion from $1.21 billion a year ago. Embedded Processing Solutions, or EPS, generated revenues of $663 million, down 17.3 percent from the same quarter last year. Total operating expenses fell to $609 million from $718 million in the preceding year. Gross margin improved to 34.3 percent from 32.4 percent in the third quarter of 2013. Looking ahead, for the fourth quarter, the company expects revenues to decline by 3.5 percent sequentially, plus or minus 3.5 percentage points. Gross margin in the fourth quarter is expected to be about 33.8 percent, plus or minus 2 percentage points. "We had a solid quarter in terms of performance across a number of metrics and year-over-year improvement...At the same time, the softening of demand towards the end of the quarter, specifically in the mass market and in microcontrollers, slowed our anticipated sequential revenue progress," said President and CEO Carlo Bozotti. The company is planning to save $100 million in expenses by discontinuing its commodity camera module products, reinforcing imaging efforts on key customer projects, and combining DCG and IBP product groups to take advantage of synergies. The firm also said it is reviewing the implications to its process technology following announcements by Research Alliance partners. STMicroelectronics expects the restructuring costs to be around $50 million. STM closed Tuesday's trading at $7.22, up 3.88 percent. Copyright RTT News/dpa-AFX |