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ST-Ericsson reports third quarter 2012 financial results
Geneva, Switzerland, October 23, 2012 - ST-Ericsson, a joint venture of STMicroelectronics (NYSE:STM) and Ericsson (NASDAQ:ERIC), reported financial results for the third fiscal quarter ending September 29, 2012.
Sales in the third quarter increased 4 percent over the prior quarter reflecting the continued ramp of NovaThor(TM) platform shipments as well as $35 million revenues from IP licensing.
Adjusted operating loss decreased sequentially by $87 million to $148 million, as the result of volume and margin improvements and of the actions to reduce operating expenses.
Didier Lamouche, President and CEO of ST-Ericsson said: "In the third quarter, we made further improvements on all the key metrics, thanks to our steady and timely progress in executing the new strategic direction we set in April. The ramp of our NovaThor integrated ModAp platforms continued with customers such as Samsung, Sony Mobile Communications and new and existing Asian customers, with new smartphones being brought to the market. Although our losses remain large, we have succeeded in halving them in two quarters thanks to our progress in cost reduction and productivity improvements. As we enter the fourth quarter and we still have to face the further decline of the legacy portion of our business, we are encouraged by new design wins on leading phones, like the recently announced Samsung Galaxy S III mini, which is the twentieth device powered by our NovaThor platform and brought to the market in about one year."
2012 third quarter financial summary (unaudited) *
*: No impairment test on Goodwill and Intangible Assets has been run in the interim period. Consequently the Income Statement and certain of its metrics, like Operating Income/(Loss) and Net Income/(Loss) are non-GAAP measures
Additional financial information
The net financial position at the end of the third quarter was negative $1351 million.
Inventory increased by $9 million reaching $180 million at the end of the third quarter.
Net operating cash flow was negative for $146 million at the end of the third quarter, representing a $103 million sequential improvement.
Outlook
ST-Ericsson expects net sales to be approximately flat sequentially for the fourth quarter 2012.
Customers
Products
Recent corporate developments
Financial results appendix (unaudited)
2011 financial results by quarter *
* : No impairment test on Goodwill and Intangible Assets has been run in the interim period. Consequently the Income Statement and certain of its metrics, like Operating Income/(Loss) and Net Income/(Loss) are non-GAAP measures
Footnotes
1) The adjusted operating income/(loss) is defined as the operating income/(loss) reported before amortization of acquisition-related intangibles and restructuring charges and is used by management to help enhance the understanding of ongoing operations and to communicate the impact of the items on the operating loss as reported.
2) Net financial position represents the balance between financial assets, which comprise cash, cash equivalents and short-term deposits, and financial debt which includes bank overdrafts and parent companies short-term bridge credit facilities.
3) Net operating cash flow is defined as net cash from operating activities, less capital expenditure and less restructuring charges.
Notes to editors
ST-Ericsson invites journalists, analysts and investors to a conference call scheduled on October 24, 2012 at 5:00 pm (CET). Call-in numbers, a live webcast of the conference call, as well as supporting slides, will be available at www.stericsson.com/investors/investors.jsp .
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 generated sales of $1.7 billion in 2011. 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.
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