STMicroelectronics Posts $2.57B 2Q11 Net Revenues

STMicroelectronics has reported net revenues of $2.567 billion for the second quarter of 2011, up 1.3 percent from $2.535 billion in the first quarter. Net income also increased significantly to $420 million, mainly due to the after-tax gain of $305 million related to the cash payment from Credit Suisse as the full and final settlement of all outstanding litigation concerning auction rate securities.

"Our second quarter net revenues and gross margin results were substantially in line with our business outlook, with sales growth driven by a solid performance from Automotive," said President and CEO Carlo Bozotti commented. "As anticipated, in this quarter we experienced headwinds related to the situation in Japan and currency rates, while continuing to face ST-Ericsson’s ongoing transition. Additionally, in June, we saw weaker demand and a much weaker than planned outlook for wireless products from a major customer and we saw signs of softening demand in some of our businesses, such as digital consumer products and microcontrollers.

"Looking at the 2011 first half, we have made measurable progress in advancing our product portfolio, clearly gaining share as net revenues from our wholly-owned businesses increased 17 percent compared to the year-ago period. Our product portfolio is gaining further traction, with significant design wins in the growth application areas we are targeting: energy management and savings, trust and data security, healthcare and wellness as well as smart consumer devices."

Regional growth was led by the Americas with sales up 8 percent. On a year-over-year basis, ST’s net revenues increased 1.4%, led by the Americas and Greater China-South Asia with growth rates of 6 percent and 5 percent, respectively. Sequential net revenue performance was driven by better than expected results in Automotive, Consumer, Computer, Communication Infrastructure (ACCI), specifically Automotive and Imaging. Analog, MEMS and Microcontrollers (AMM) was slightly below expectations mainly due to customer demand changes and adjustments linked to the supply-chain disruption as a result of the crisis in Japan. Power Discrete Products (PDP), as well as ST-Ericsson, were in line with expectations and were principally negatively impacted by reduced demand at a major customer.

Combined SG&A and R&D expenses increased sequentially to $895 million, mainly due to unfavorable currency effects and a lower level of sales of R&D services at ST-Ericsson, compared to $874 million and $895 million in the prior and year-ago quarters, respectively. Combined operating expenses, as a percentage of sales, were 34.9 percent in the 2011 second quarter compared to 34.5 percent and 35.4 percent in the prior and year-ago quarters, respectively.

For more information on ST's financial results, please visit www.st.com.