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STMicro reports bigger 1Q loss than expected

Source : AP
Last Updated: Mon, Apr 23, 2012 22:31 hrs

STMicroelectronics NV, a maker of chips for cars and home entertainment systems, reported a first-quarter loss as revenue fell 20 percent and its money-losing joint venture ST-Ericsson announced it would cut a quarter of its workforce.

The net loss in the three months to March 31 came to $176 million, or 20 cents per share, reversing a profit of $170 million, or 19 cents per share, a year ago.

Excluding a negative arbitration ruling in a business dispute and restructuring charges, the Geneva-based company's adjusted loss came to 14 cents per share, larger than the 6 cents per share loss expected by analysts polled by FactSet.

Revenue fell to $2.02 billion from $2.54 billion. That was just short of the $2.03 billion analysts were looking for.

CEO Carlo Bozotti said in a statement that losses at its wireless joint venture, ST-Ericsson, "weighed heavily on our quarterly results again." But he pointed to the restructuring announced Monday as important to "significantly reduce its operating losses throughout 2012."

ST-Ericsson, the joint venture of STMicroelectronics NV and LM Ericsson Telephone Co., on Monday said it would cut 1,700 jobs, or a quarter of its workforce.

ST-Ericsson expects the restructuring to take until the end of next year and cost $130 million to $150 million. Its goal is to save $320 million per year from the job cuts.

The venture has lost money every year since it was formed in February 2009.

Bozotti said he believes orders "bottomed" in the first quarter.

The company expects second-quarter revenue to grow about 7.5 percent from the first quarter, implying revenue of $2.17 billion. That is roughly in line with the $2.18 billion expected by analysts.

Shares fell 63 cents, or 9.6 percent, to $5.95 in the regular trading session Monday. They rose 10 cents, or 1.7 percent, to $6.05 in extended trading.




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