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STMicroelectronics Reports 2012 First Quarter Financial Results

GENEVA, April 23, 2012 /PRNewswire/ -- STMicroelectronics (NYSE: STM) reported financial results for the first quarter ended March 31, 2012.

First quarter net revenues decreased 8% to $2.02 billion on a sequential basis, while gross margin was 29.6%, absorbing anticipated unsaturation charges related to fab loading and a one-time unexpected charge resulting from an arbitration award.

President and CEO Carlo Bozotti commented, "ST's wholly-owned businesses in the first quarter posted a sequential decrease of 3%, better than historical seasonality, benefiting from growth in the Automotive segment and the Analog, MEMS and Microcontrollers sector.

"Our Wireless segment losses weighed heavily on our quarterly results again. However, ST-Ericsson has announced today its new strategic direction and renewed business model with a key objective to significantly reduce its operating losses throughout 2012 as it moves towards leadership and improved financial returns.

"In total, first quarter activity levels across ST's product portfolio tracked closely to our expectations, with net revenues near the mid-point of our business outlook. Similarly, gross margin evolution was consistent with our continued focus on inventory management and in the first quarter gross margin absorbed approximately 600 basis points of unsaturation charges and a one-time unexpected charge resulting from an arbitration award. The effort on inventory reduction and prudent capital management led to a quarter on quarter increase in free cash flow and a further improvement in ST's financial position which stood at $1.27 billion."*

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( (*))Free cash flow and ST financial position are non-U.S. GAAP measures. Please refer to Attachment A for additional information explaining why the Company believes these measures are important and for reconciliation to U.S. GAAP.

Summary Financial Highlights

    U.S. GAAP                            Q1 2012        Q4 2011        Q1 2011
    (In Million US$)
    ---------------
    Net Revenues (a)                             2,017          2,191          2,535
    ---------------                              -----          -----          -----
    Gross Margin                                  29.6%          33.4%          39.1%
    ------------                                  ----           ----           ----
    Operating Income (Loss), as reported          (352)          (132)           118
    ------------------------------------          ----           ----            ---
    Net Income (Loss)                             (176)           (11)           170
    ----------------                              ----            ---            ---

((a)) Net revenues include sales recorded by ST-Ericsson as consolidated by ST

    Non-U.S. GAAP*          Q1 2012         Q4 2011        Q1 2011
    Before impairment,
     restructuring and one-
     time items
    (In Million US$)
    ---------------
    Operating Income (Loss)           (280)          (123)         142
    ----------------------            ----           ----          ---
    Operating Margin                (13.9%)         (5.6%)         5.6%
    ----------------                ------          -----          ---
    Operating Margin -
     Attributable to ST              (6.5%)         (0.2%)         9.9%
    -------------------              -----          -----          ---

First Quarter Review

ST's first quarter net revenues decreased 8.0% on a sequential basis, within our guidance, with ST's wholly-owned businesses posting a sequential decrease of 3%, better than historical seasonality, while the Wireless product segment was lower by 29%. EMEA led all regions with 8.9% sequential growth while the Americas decreased by 4.5%, Japan & Korea down by 8.8% and Greater China & South Asia down by 16.7%.

Gross margin in the first quarter was 32.2%, excluding a one-time 260 basis point impact due to the charge on ST's cost of sales following an award from an arbitration tribunal ordering ST to pay approximately $59 million to NXP Semiconductors as announced on April 9, 2012. The first quarter gross margin was negatively impacted by an unsaturation charge of $71 million driven by inventory reduction and a severe deterioration of manufacturing performance due to a low level of loading and less favorable than expected product mix.

Combined SG&A and R&D expenses were $943 million compared to $894 million in the prior quarter mainly due to seasonality and reduced activity in the prior quarter. Combined operating expenses, as a percentage of sales, were 46.8% in the 2012 first quarter compared to 40.8% in the prior quarter.

Mainly due to increased losses at ST-Ericsson and excluding the one-time impact of the arbitration award, operating margin before impairment, restructuring and one-time items attributable to ST was negative 6.5% in the 2012 first quarter compared to about break-even in the prior quarter.*

In the first quarter of 2012, ST booked $159 million as a result attributable to non-controlling interests, which mainly included the 50% owned by Ericsson in the ST-Ericsson joint venture, as consolidated by ST. In the fourth quarter of 2011, the corresponding amount was $199 million.

First quarter net loss was $176 million or $(0.20) per share, compared to net loss of $(0.01) and net income of $0.19 per diluted share in the prior and year-ago quarters, respectively. On an adjusted basis, net of related taxes, ST reported non-U.S. GAAP net loss per share of $(0.14), excluding impairment and restructuring charges and the one-time impact of the arbitration award, in the first quarter, compared to net loss of $(0.01) and net income of $0.20 per diluted share in the prior and year-ago quarters, respectively.*

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((*))Operating income before impairment, restructuring and one-time items, operating margin before impairment, restructuring and one-time items, operating margin before impairment, restructuring and one-time items attributable to ST and adjusted net earnings (loss) per share are non-U.S. GAAP measures. For additional information and a reconciliation to U.S. GAAP, please refer to Attachment A.

For the first quarter of 2012, the effective average exchange rate for the Company was approximately $1.33 to euro1.00 compared to $1.36 to euro1.00 for the fourth quarter of 2011 and $1.33 to euro1.00 for the first quarter of 2011.

Net Revenues by Market Segment / Channel

    Net Revenues By Market Segment /
     Channel (*)                     Q1 2012      Q4 2011      Q1 2011
    (Estimated and In %)
    -------------------
    Market Segment / Channel:
    -------------------------
       Automotive                             20%          18%          17%
       ----------                            ---          ---          ---
       Computer                               14%          13%          14%
       --------                              ---          ---          ---
       Consumer                               11%          10%          11%
       --------                              ---          ---          ---
       Industrial & Other                     10%           9%           8%
       ------------------                    ---          ---          ---
       Telecom                                24%          30%          26%
       -------                               ---          ---          ---
    Total OEM                                 79%          80%          76%
    ---------                                ---          ---          ---
    Distribution                              21%          20%          24%
    ------------                             ---          ---          ---

((*) )Sales recorded by ST-Ericsson and consolidated by ST are included in Telecom and Distribution.

On a sequential basis, Computer and Automotive led all market segments with both growing 2%. Industrial & Other was flat while Consumer decreased by 4% and Telecom by 25%. Distribution decreased 1%.

Revenues and Operating Results by ST Product Segment

Commencing January 1, 2012, the Company began reporting the former ACCI Product Segment (Automotive/Consumer/Computer/Communication Infrastructure) into the other segments. The new product segments are Automotive Segment ("APG") and Digital Sector ("Digital") comprised of the Digital Convergence Group ("DCG") and Imaging, BiCMOS ASIC and Silicon Photonics Group ("IBP").

                     Operating Segment Q1 2012      Q1 2012   Q4 2011       Q4 2011   Q1 2011    Q1 2011
                      (In Million US$)   Net       Operating      Net     Operating       Net   Operating
                                       Revenues       Income  Revenues Income (Loss)  Revenues    Income
                                                      (Loss)                                      (Loss)
    ---                                               -----                                       -----
    Automotive (APG)                              391          37        383           41        433        60
    ---------------                               ---         ---        ---          ---        ---       ---
    Analog, MEMS & Microcontrollers               758          99        747          116        886       177
    -------------------------------               ---         ---        ---          ---        ---       ---
    Digital                                       336         (38)       388            9        488        45
    -------                                       ---         ---        ---          ---        ---       ---
    Power Discrete                                233          (6)       253           16        333        50
    --------------                                ---         ---        ---          ---        ---       ---
    Wireless (a)                                  290        (293)       409         (211)       384      (180)
    -----------                                   ---        ----        ---         ----        ---      ----
    Others (b)(c)                                   9        (151)        11         (103)        11       (34)
    ------------                                  ---        ----        ---         ----        ---       ---
    TOTAL                                       2,017        (352)     2,191         (132)     2,535       118
    -----                                       -----        ----      -----         ----      -----       ---

( (a)) Wireless includes the portion of sales and operating results of ST-Ericsson as consolidated in the Company's revenues and operating results, as well as other items affecting operating results related to the wireless business.

((b)) Net revenues of "Others" includes revenues from sales of Subsystems, assembly services and other revenues.

((c)) Operating income (loss) of "Others" includes items such as unused capacity charges, impairment, restructuring charges and other related closure costs, phase out and start-up costs, NXP arbitration award and other unallocated expenses such as: strategic or special research and development programs, certain corporate-level operating expenses, patent claims and litigations, and other costs that are not allocated to product groups, as well as operating earnings or losses of the Subsystems and Other Products Group. "Others" includes $71 million, $99 million and $2 million of unused capacity charges in the first quarter of 2012 and fourth and first quarters of 2011, respectively; and $18 million, $9 million and $24 million of impairment, restructuring charges and other related closure costs in the first quarter of 2012 and fourth and first quarters of 2011, respectively.

Automotive (APG) first quarter net revenues increased 2% sequentially, mainly driven by market share gains and market improvement in the U.S. and Japan. APG operating margin was 9.4% compared to 10.5% in the prior quarter.

Analog, MEMS and Microcontrollers (AMM) first quarter net revenues increased 1.5% sequentially driven by a solid recovery of Microcontrollers and benefiting from an expanding product portfolio. AMM operating margin was 13.1% in the 2012 first quarter, compared to 15.5% in the prior quarter.

Digital first quarter net revenues decreased 13.2% sequentially principally due to a significant decrease in imaging revenues related to certain wireless customers and to a lesser extent seasonality. Digital operating margin was negative 11.2% in the 2012 first quarter, compared to positive 2.4% in the prior quarter.

Power Discrete (PDP) first quarter net revenues decreased 8.2% sequentially principally reflecting a wireless customer specific situation and still weak market conditions. PDP operating margin was negative 2.6% in the 2012 first quarter due to manufacturing inefficiencies resulting from low fab loading compared to positive 6.4% in the prior quarter.

Wireless net revenues in the first quarter decreased 29% compared to the prior quarter due to a drop in sales of new products at one of ST-Ericsson's largest customers, in addition to the usual seasonal effect and to the continued decline of ST-Ericsson's legacy products. Wireless operating loss was $293 million in the first quarter, or $135 million after considering non-controlling interest, compared to a loss of $211 million, or $93 million after considering non-controlling interest, in the prior quarter.

For additional information, see ST-Ericsson's Q1 2012 earnings results press release at www.stericsson.com

Cash Flow and Balance Sheet Highlights

Free cash flow was $98 million in the first quarter compared to $47 million in the prior quarter.*

Capital expenditure payments were $125 million during the first quarter of 2012 compared to $76 million in the prior quarter.

Inventory decreased by $23 million to $1.51 billion at quarter end.

In the first quarter, dividends paid to shareholders were $88 million. In addition, the Company paid $213 million to redeem nearly the entire residual outstanding 2016 convertible bonds.

ST continued to maintain a strong net financial position with a net cash position of $1.27 billion, as adjusted, taking into account the 50% of ST-Ericsson's debt, at March 31, 2012 compared to $1.17 billion at December 31, 2011. ST's cash and cash equivalents, marketable securities and restricted cash equaled $2.2 billion and total debt was $1.4 billion at March 31, 2012.*

Total equity, including non-controlling interest, was $7.84 billion at quarter end.

In the 2012 first quarter the Company posted a return on net assets (RONA) attributable to ST of negative 11.2%.*

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((*))Free cash flow, net financial position and RONA attributable to ST are non-U.S. GAAP measures. For additional information and a reconciliation to U.S. GAAP, please refer to Attachment A.

Second Quarter 2012 Business Outlook

Mr. Bozotti stated, "While there are still macro-economic uncertainties, we believe billings have bottomed in the first quarter. Bookings have improved across the board during the course of the first quarter.

"Based on current visibility, we expect broad-based growth in all product segments during the second quarter leading to revenue growth of about 7.5 percent at the mid-point of our guidance. Looking further ahead we also anticipate broad-based revenue growth with a strong acceleration in MEMS and Analog in the second half of 2012 thanks to our new and innovative products and our expanding customer base."

The Company expects second quarter 2012 revenues to grow sequentially in the range of about +7.5%, plus or minus 3 percentage points. As a result, gross margin in the second quarter is expected to be about 34.4%, plus or minus 1.5 percentage points, and assumes an improvement from the first quarter amount from fab loading and manufacturing performance.

This outlook is based on an assumed effective currency exchange rate of approximately $1.33 = euro 1.00 for the 2012 second quarter and includes the impact of existing hedging contracts. The second quarter will close on June 30, 2012.

Recent Corporate Developments

    --  Corporate Knights, Inc. named ST to its "Global 100 Most Sustainable
        Corporations" list for the third consecutive year. One of only three
        semiconductor companies so recognized, ST advanced 8 places to 75th
        place from its 83rd ranking in 2011.
    --  ST assigned Carlo Ferro to ST-Ericsson as Chief Operating Officer to
        focus, along with ST-Ericsson President and CEO Didier Lamouche, on the
        turnaround of ST-Ericsson. Mario Arlati, formerly ST's Chief Accounting
        Officer and head of corporate external reporting, was appointed chief
        financial officer.
    --  On April 5, an arbitration tribunal set up according to the rules of the
        International Chamber of Commerce, ordered ST to pay approximately $59
        million to NXP Semiconductors B.V. concerning a dispute related to a
        claim from NXP for underloading charges to be included in the price of
        wafers which NXP supplied to ST's wireless JV. The tribunal chose not to
        address certain issues raised by ST that will be part of a second
        arbitration between the same ICC tribunal scheduled for June 2012, with
        a final decision coming within 12 months. Though the award has been
        recognized in these Q1 results, ST intends to vigorously pursue its
        claims in the second arbitration aiming to convince the tribunal to
        reverse the economic effect of its first arbitration award.
    --  On April 16, ST announced the main resolutions to be submitted for
        shareholder approval at the Company's Annual General Meeting, which will
        be held in Amsterdam on May 30, 2012. The main resolutions, proposed by
        the Supervisory Board, include:
        --  The appointment of Ms. Martine Verluyten  as a new member of the
            Supervisory Board for a three-year term, expiring at the 2015 Annual
            General Meeting, in replacement of Mr. Doug Dunn whose mandate will
            expire;
        --  Approval of the Company's 2011 accounts reported in accordance with
            International Financial Reporting Standards (IFRS); and
        --  The distribution of a cash dividend of US$0.40 per share, to be paid
            in four equal quarterly installments in June, August and December
            2012 and February 2013 to shareholders of record in the month of
            each quarterly payment.

The record date for all shareholders to participate at the Annual General Meeting will be May 2, 2012. The complete agenda and all relevant detailed information concerning the STMicroelectronics N.V. Annual General Meeting, as well as all related AGM materials, are available on the Company's web site (www.st.com) and made available to shareholders in compliance with legal requirements.

The first payment date will be on June 7, 2012 for the European Stock Exchanges and on June 12, 2012 for the NYSE.

Q1 2012 - Product and Technology Highlights

During the quarter, ST made solid progress with important new-product introductions and significant design wins in its key growth areas, including energy management & savings, trust & data security, healthcare & wellness and smart consumer devices.

Automotive

    --  Collected design wins for 32-bit microcontrollers for entry-level and
        next-generation braking systems from Tier1 manufacturers confirming ST's
        leading position in advanced functional safety architectures.
    --  Awarded body-control modules from an American Tier1 manufacturer for a
        leading German car maker and from an Indian car maker.
    --  Improved market penetration in Japan by consolidating market share with
        a new body-control module awarded by a Japanese Tier1 car maker.

Digital Sector

Digital Convergence

    --  Earned seven major design wins in China, Europe and the US for the new
        40nm-IC mainstream STB family.
    --  Continued strong momentum in India cable and satellite markets leading
        to a doubling of sales volume by earning multiple design wins.
    --  Collected several design wins in Europe and Asia for the ARM Cortex
        A9-based, "Orly" high-performance Home Application processor
        manufactured in 32nm process technology.
    --  Earned design-in of Freeman family of products with a Tier1 OEM customer
        serving the European market.
    --  Won multiple design-ins at Tier1 OEMs with the "Athena" multimedia
        monitor system-on-a-chip family into a diverse range of products,
        including high-performance monitors, TVs, and digital signage.

Imaging, Bi-CMOS ASIC and Silicon Photonics

    --  Earned two ASIC designs in 32nm process technology for networking
        applications from a leading player in the market.
    --  Signed an agreement with Luxtera to bring silicon photonics into the
        mainstream for high-speed computing by establishing a 300mm design
        platform in ST's Crolles fab.

Analog, MEMS and Microcontrollers

    --  Was awarded a design win for the low-power STM8L 8-bit microcontroller
        on a smart phone accessory from a world leader.
    --  Achieved further pervasion for the STM32 at major Appliance OEMs in
        EMEA, in both Human Machine Interface and motor-control applications.
    --  Earned a design-win for the Italian e-passport application for the
        secure ST23YR80 microcontroller.
    --  Won a number of designs for digital MEMS microphones at Taiwanese
        manufacturers for PC applications.
    --  Started shipping MEMS accelerometers and STM32 microcontrollers to two
        major US consumer manufacturers for fitness applications.
    --  Awarded MEMS gyroscope and accelerometer design win for a tablet
        computer by world-leading consumer customer.
    --  Won a significant design-in of a MEMS gyroscope and accelerometer for a
        next-generation mobile phone by a leading US consumer manufacturer.
    --  New ultra-compact accelerometer selected by a Korean market leader for
        feature- and low-end smartphones.
    --  Gained significant market share in Motion MEMS in the Chinese
        mobile-phone market with next-generation design-ins.
    --  Ramped-up production of accelerometers and gyroscopes for mobile phones
        and an automotive eTolling system for Europe.
    --  Earned several design-ins with major European customers for an 8-bit
        microcontroller for digital lighting management.

Power Discretes

    --  New RF IPD (Integrated Passive Device technology) wideband coupler was
        qualified by a major US smartphone and tablet maker for WLAN
        application.
    --  A US computer and consumer market leader selected ST's voltage regulator
        for use in a notebook computer.
    --  Secured design wins for the robust trench-gate field-stop IGBTs with
        several solar-power and welding customers in Europe and China.
    --  Achieved a design win for SLLIMM intelligent power modules at a US
        white-goods maker.
    --  Several key customers selected ST's low-power level translators, the
        first to support the newest Secure Digital 3.0 memory card standard, for
        use in advanced smartphone and tablet applications.

ST-Ericsson

    --  Products
        --  Announced at Mobile World Congress, the new NovaThor(TM) L8540 is an
            LTE/HSPA+/TD-HSPA-enabled integrated smartphone platform with the
            powerful application processor and modem integrated on a single die,
            and is scheduled to sample to customers in the second half 2012.
        --  Unveiled the CG2905, the industry's first connectivity platform
            solution with simultaneous support for GPS and GLONASS technology,
            Bluetooth and FM Radio all integrated on a single 40nm device.
        --  Introduced first fully integrated wireless charger for mobile phones
            with the PM2020.
    --  Customers
        --  Samsung is now a customer of the ST-Ericsson NovaThor(TM) platform.
            The new Samsung GALAXY S Advance Android-powered smartphone uses the
            ST-Ericsson NovaThor(TM) U8500 system.
        --  Xperia(TM) P, Xperia(TM) U, and Xperia(TM) sola are the first three
            smartphones by Sony Mobile Communications to use the NovaThor U8500
            ModAp system, combining application processing, modem and
            connectivity.
        --  Thor(TM) M5780 HSPA+ modem powers the next-generation Panasonic
            Eluga smartphone.
        --  Ontim WP8500 tablet to be the first commercially available
            Android-based tablet using the NovaThor U8500 system.
    --  Partners/technology
        --  Selected fully depleted silicon on insulator (FD-SOI) technology for
            use in future mobile platforms, leveraging ST technology based on
            Soitec SOI, which will enable enhanced performance from the
            ST-Ericsson NovaThor(TM) platform at much lower battery usage - as
            much as 35 percent lower power consumption at maximum performance.
        --  Continued cooperation with metaio, reaching another milestone in
            supporting metaio's new 3D object tracking technology.
        --  Joined the W3C Core Mobile Web Platform Community Group kicked off
            by Facebook.
        --  SRS Labs has made their TruMedia audio processing technology
            available on the ST-Ericsson Snowball development platform.

IPD, SLLIMM, Athena, Freeman,and Orly are trademarks of STMicroelectronics. Thor and NovaThor are trademarks of ST-Ericsson. All other trademarks are the property of their respective owners.

Use of Supplemental Non-U.S. GAAP Financial Information

This press release contains supplemental non-U.S. GAAP financial information, including operating income (loss) before impairment, restructuring and one-time items, operating margin before impairment, restructuring and one-time items, operating margin before impairment, restructuring and one-time items attributable to ST, adjusted net earnings (loss), adjusted net earnings (loss) per share, free cash flow, RONA attributable to ST, net financial position and net financial position adjusted to account for 50% investment in ST-Ericsson.

Readers are cautioned that these measures are unaudited and not prepared in accordance with U.S. GAAP and should not be considered as a substitute for U.S. GAAP financial measures. In addition, such non-U.S. GAAP financial measures may not be comparable to similarly titled information by other companies.

See Attachment A of this press release for a reconciliation of the Company's non-U.S. GAAP financial measures to their corresponding U.S. GAAP financial measures. To compensate for these limitations, the supplemental non-U.S. GAAP financial information should not be read in isolation, but only in conjunction with the Company's consolidated financial statements prepared in accordance with U.S. GAAP.

Forward-looking information

Some of the statements contained in this release that are not historical facts are statements of future expectations and other forward-looking statements (within the meaning of Section 27A of the Securities Act of 1933 or Section 21E of the Securities Exchange Act of 1934, each as amended) that are based on management's current views and assumptions, and are conditioned upon and also involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those in such statements due to, among other factors:

    --  the possible impact of an impairment charge on the carrying value of the
        ST-Ericsson investment in our books of approximately $1.7 billion as
        well as on our consolidated results of the successful execution of
        ST-Ericsson's new strategic direction plan and its related savings
        announced on April 23rd 2012;
    --  changes in demand in the key application markets and/or from key
        customers served by our products, including demand for products where we
        have achieved design wins and/or demand for applications where we are
        targeting growth, all of which make it extremely difficult to accurately
        forecast and plan our future business activities;
    --  our ability in periods of reduced demand or visibility on orders to
        reduce our expenses as required, as well as our ability to operate our
        manufacturing facilities at sufficient levels with existing process
        technologies to cover our fixed operating costs;
    --  our ability, in an intensively competitive environment, to identify and
        allocate necessary design resources to successfully develop and secure
        customer acceptance for new products meeting their expectations as well
        as our ability to achieve our pricing expectations for high-volume
        supplies of new products in whose development we have been, or are
        currently, investing;
    --  the financial impact of obsolete or excess inventories if actual demand
        differs from our expectations as well as the ability of our customers to
        successfully compete in the markets they serve using our products;
    --  our ability to maintain or improve our competiveness when a high
        percentage of our costs are fixed and are incurred in Euros and
        currencies other than U.S. dollars, especially in light of the
        increasing volatility in the foreign exchange markets and, more
        particularly, in the U.S. dollar exchange rate as compared to the Euro
        and the other major currencies we use for our operations;
    --  the outcome of ongoing litigation as well as any new litigation to which
        we may become a defendant;
    --  changes in our overall tax position as a result of changes in tax laws,
        expected income or the outcome of tax audits, changes in international
        tax treaties which may impact are results of operations as well as our
        ability to accurately estimate tax credits, benefits, deductions and
        provisions and to realize deferred tax assets;
    --  the impact of intellectual property ("IP") claims by our competitors or
        other third parties, and our ability to obtain required licenses on
        reasonable terms and conditions;
    --  product warranty or liability claims based on epidemic or delivery
        failures or recalls by our customers for a product containing one of our
        parts;
    --  availability and costs of raw materials, utilities, third-party
        manufacturing services, or other supplies required by our operations;
        and
    --  current economic uncertainties involving the possibility during 2012 of
        limited growth or recession in global or important regions of the world
        economy, sovereign default, changes in the political, social, economic
        or infrastructure environment, including as a result of military
        conflict, social unrest and/or terrorist activities, economic turmoil,
        as well as natural events such as severe weather, health risks,
        epidemics, earthquakes, tsunami, volcano eruptions or other acts of
        nature in, or affecting, the countries in which we, our key customers or
        our suppliers, operate and causing unplanned disruptions in our supply
        chain and reduced or delayed demand from our customers.

Such forward-looking statements are subject to various risks and uncertainties, which may cause actual results and performance of our business to differ materially and adversely from the forward-looking statements. Certain forward-looking statements can be identified by the use of forward-looking terminology, such as "believes," "expects," "may," "are expected to," "should," "would be," "seeks" or "anticipates" or similar expressions or the negative thereof or other variations thereof or comparable terminology, or by discussions of strategy, plans or intentions. Some of these risk factors are set forth and are discussed in more detail in "Item 3. Key Information -- Risk Factors" included in our Annual Report on Form 20-F for the year ended December 31, 2011, as filed with the SEC on March 5, 2012. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in this release as anticipated, believed or expected. We do not intend, and do not assume any obligation, to update any industry information or forward-looking statements set forth in this release to reflect subsequent events or circumstances.

STMicroelectronics Conference Call and Webcast Information

On April 24, 2012, the management of STMicroelectronics will conduct a conference call to discuss the Company's operating performance for the first quarter of 2012.

The conference call will be held at 9:00 a.m. U.S. Eastern Time / 3:00 p.m. CET. The conference call will be available live via the Internet by accessing http://investors.st.com. Those accessing the webcast should go to the Web site at least 15 minutes prior to the call, in order to register, download, and install any necessary audio software. The webcast will be available until May 4, 2012.

About STMicroelectronics

ST is a global leader in the semiconductor market serving customers across the spectrum of sense and power technologies and multimedia convergence applications. From energy management and savings to trust and data security, from healthcare and wellness to smart consumer devices, in the home, car and office, at work and at play, ST is found everywhere microelectronics make a positive and innovative contribution to people's life. By getting more from technology to get more from life, ST stands for life.augmented.

In 2011, the Company's net revenues were $9.73 billion. Further information on ST can be found at www.st.com.

(Attachment A)

STMicroelectronics
Supplemental Non-U.S. GAAP Financial Information
U. S. GAAP - Non-U.S. GAAP Reconciliation
In Million US$ Except Per Share Data

The supplemental non-U.S. GAAP information presented in this press release is unaudited and subject to inherent limitations. Such non-U.S. GAAP information is not based on any comprehensive set of accounting rules or principles and should not be considered as a substitute for U.S. GAAP measurements. Also, our supplemental non-U.S. GAAP financial information may not be comparable to similarly titled non-U.S. GAAP measures used by other companies. Further, specific limitations for individual non-U.S. GAAP measures, and the reasons for presenting non-U.S. GAAP financial information, are set forth in the paragraphs below. To compensate for these limitations, the supplemental non-U.S. GAAP financial information should not be read in isolation, but only in conjunction with our consolidated financial statements prepared in accordance with U.S. GAAP.

Operating income (loss) before, impairment, restructuring and one-time items is used by management to help enhance an understanding of ongoing operations and to communicate the impact of the excluded items, such as impairment, restructuring charges and other related closure costs. Adjusted net earnings and earnings per share (EPS) are used by management to help enhance an understanding of ongoing operations and to communicate the impact of the excluded items like impairment, restructuring charges and other related closure costs attributable to ST, the impact of the sale of Micron shares, other-than-temporary impairment (OTTI) charges on financial assets, NXP arbitration award, net of the relevant tax impact.

Return on net assets (RONA) is considered by management to be the key financial and economic metric to measure the return on invested capital. RONA is the ratio of operating income before impairment and restructuring charges divided by average net assets used during the period. ST defines average net assets as average total assets net of total liabilities as reported in our consolidated balance sheet excluding all items related to our financial position such as cash and cash equivalents, marketable securities, short-term deposits, bank overdrafts, current portion of long-term debt and long-term debt.

Operating income (loss) before impairment, restructuring and one-time items attributable to ST is calculated as operating income (loss) before impairment, restructuring and one-time items excluding 50% of ST-Ericsson operating income (loss) before impairment, restructuring and one-time items as consolidated by ST. Operating margin before impairment, restructuring and one-time items attributable to ST is calculated as operating income (loss) before restructuring attributable to ST divided by reported revenues excluding 50% of ST-Ericsson revenues as consolidated by ST. RONA attributable to ST is calculated as annualized operating income (loss) before restructuring attributable to ST divided by reported net assets excluding 50% of ST-Ericsson net assets as consolidated by ST.

The Company believes that these non-GAAP financial measures provide useful information for investors and management because they measure the Company's capacity to generate profits from its business operations, excluding the effect of acquisitions and expenses related to the rationalizing of its activities and sites that it does not consider to be part of its on-going operating results, thereby offering, when read in conjunction with the Company's GAAP financials, (i) the ability to make more meaningful period-to-period comparisons of the Company's on-going operating results, (ii) the ability to better identify trends in the Company's business and perform related trend analysis, and (iii) an easier way to compare the Company's results of operations against investor and analyst financial models and valuations, which usually exclude these items.

    Q1 2012           Gross Profit       Operating         Net Earnings       Corresponding
    (US$ millions and
     cents per share)                  Income (loss)                           EPS (basic)
    -----------------                   ------------                            ----------
    U.S. GAAP                      596               (352)              (176)               (0.20)
    ---------                      ---               ----               ----                -----
    Impairment &
     Restructuring                                     18                 13
    --------------                                    ---                ---
    NXP Arbitration
     Award                                             54                 56
    ---------------                                   ---                ---
    Estimated Income
     Tax Effect                                                          (13)
    ----------------                                                     ---
    Non-U.S GAAP                   596               (280)              (120)               (0.14)
    ------------                   ---               ----               ----                -----
    Q4 2011           Gross Profit       Operating         Net Earnings       Corresponding
    (US$ millions and
     cents per share)                  Income (loss)                           EPS (basic)
    -----------------                   ------------                            ----------
    U.S. GAAP                      732               (132)               (11)               (0.01)
    ---------                      ---               ----                ---                -----
    Impairment &
     Restructuring                                      9                  5
    --------------                                    ---                ---
    Estimated Income
     Tax Effect                                                           (2)
    ----------------                                                     ---
    Non-U.S GAAP                   732               (123)                (8)               (0.01)
    ------------                   ---               ----                ---                -----
    Q1 2011           Gross Profit       Operating         Net Earnings       Corresponding
    (US$ millions and
     cents per share)                      Income                             EPS (diluted)
    -----------------                      ------                              ------------
    U.S. GAAP                      991                118                170                 0.19
    ---------                      ---                ---                ---                 ----
    Impairment &
     Restructuring                                     24                 22
    --------------                                    ---                ---
    Gain on sale of
     Micron shares                                                       (21)
    ---------------                                                      ---
    OTTI                                                                   5
    ----                                                                 ---
    Estimated Income
     Tax Effect                                                           (1)
    ----------------                                                     ---
    Non-U.S GAAP                   991                142                175                 0.20
    ------------                   ---                ---                ---                 ----


(Attachment A - continued)

Net financial position: resources (debt), represents the balance between our total financial resources and our total financial debt. Our total financial resources include cash and cash equivalents, current and non-current marketable securities, short-term deposits and restricted cash, and our total financial debt includes bank overdrafts, if any, short-term borrowings, current portion of long-term debt and long-term debt, all as reported in our consolidated balance sheet. We believe our net financial position provides useful information for investors because it gives evidence of our global position either in terms of net indebtedness or net cash position by measuring our capital resources based on cash, cash equivalents and marketable securities and the total level of our financial indebtedness. Net financial position is not a U.S. GAAP measure.

    Net Financial
     Position (in
     US$
     millions)    March 31, 2012    December 31,         April 2, 2011
                                                   2011
    ---                                            ----
    Cash and cash
     equivalents             2,059                1,912             1,928
    -------------            -----                -----             -----
    Marketable
     securities,
     current                   154                  413               719
    ------------               ---                  ---               ---
    Short-term
     deposits                    -                    -                71
    ----------                 ---                  ---               ---
    Restricted
     cash                        3                    3                92
    ----------                 ---                  ---               ---
    Non-current
     restricted
     cash                        4                    5                 -
    -----------                ---                  ---               ---
    Marketable
     securities,
     non-current                 -                    -                77
    ------------               ---                  ---               ---
    Total
     financial
     resources               2,220                2,333             2,887
    ----------               -----                -----             -----
    Bank
     overdrafts,
     short-term
     borrowings
     and current
     portion of             (1,076)                (740)             (717)
    long-term
     debt
    ---------
    Long-term
     debt                     (366)                (826)           (1,032)
    ---------                 ----                 ----            ------
    Total
     financial
     debt                   (1,442)              (1,566)           (1,749)
    ----------              ------               ------            ------
    Net financial
     position                  778                  767             1,138
    -------------              ---                  ---             -----

    Net financial
     position,
     adjusted to
     account for
      50%                    1,267                1,167             1,255
    investment in
     ST-Ericsson
    -------------

Free cash flow is defined as net cash from operating activities minus net cash used in investing activities, excluding payment for purchases of and proceeds from the sale of marketable securities (both current and non-current), short-term deposits and restricted cash. We believe free cash flow provides useful information for investors and management because it measures our capacity to generate cash from our operating and investing activities to sustain our operating activities. Free cash flow is not a U.S. GAAP measure and does not represent total cash flow since it does not include the cash flows generated by or used in financing activities. In addition, our definition of free cash flow may differ from definitions used by other companies.

    Free cash flow (in US$
     millions)                  Q1 2012       Q4 2011      Q1 2011
    ----------------------     -------       -------       -------
    Net cash from operating
     activities                         250           137           350
    -----------------------             ---           ---           ---
    Net cash from (used in)
     investing activities               113            43          (206)
    -----------------------             ---           ---          ----
    Payment for purchases of
     (proceeds from sale of)
     current                           (265)         (133)          (93)
    and non-current marketable
     securities, short-term
     deposits
    and restricted cash, net
    ------------------------
    Free cash flow                       98            47            51
    --------------                      ---           ---           ---

    STMicroelectronics
     N.V.
    Consolidated
     Statements of
     Income
    (in millions of U.S.
     dollars, except per
     share data ($))

                           Three Months Ended
                           ------------------
                               (Unaudited)           (Unaudited)
                               ----------            ----------
                                          March 31,              April 2,
                                               2012                  2011
                                               ----                  ----

    Net
     sales                                    2,010                 2,523
    Other revenues                                7                    12
      NET REVENUES                            2,017                 2,535
    Cost of sales                            (1,421)               (1,544)
      GROSS PROFIT                              596                   991
    Selling, general and
     administrative                            (310)                 (312)
    Research and
     development                               (633)                 (562)
    Other income and
     expenses, net                               13                    25
    Impairment,
     restructuring
     charges and other
     related closure
     costs                                      (18)                  (24)
      Total Operating
       Expenses                                (948)                 (873)
      OPERATING INCOME
       (LOSS)                                  (352)                  118
    Other-than-
     temporary
     impairment charge
     on financial assets                          -                    (5)
    Interest expense,
     net                                        (13)                  (15)
    Earnings (loss) on
     equity-method
     investments                                 (7)                   (6)
    Gain on financial
     instruments, net                             3                    22
      INCOME (LOSS) BEFORE
       INCOME TAXES                            (369)                  114
       AND NONCONTROLLING
        INTEREST
    Income tax benefit
     (expense)                                   34                   (31)
                                                ---                   ---
      NET INCOME (LOSS)                        (335)                   83
    Net loss (income)
     attributable to
     noncontrolling
     interest                                   159                    87
                                                ---                   ---
      NET INCOME (LOSS)
       ATTRIBUTABLE TO
       PARENT COMPANY                          (176)                  170
                                               ====                   ===

      EARNINGS (LOSS) PER
       SHARE (BASIC)
       ATTRIBUTABLE TO
       PARENT COMPANY
       STOCKHOLDERS                           (0.20)                 0.19
      EARNINGS (LOSS) PER
       SHARE (DILUTED)
       ATTRIBUTABLE TO
       PARENT COMPANY
       STOCKHOLDERS                           (0.20)                 0.19

      NUMBER OF WEIGHTED
       AVERAGE
      SHARES USED IN
       CALCULATING
      DILUTED EARNINGS
       (LOSS) PER SHARE                       885.0                 907.4




    STMicroelectronics N.V.

                                    SELECTED CASH FLOW DATA
                                    -----------------------

    Cash Flow Data (in US$
     millions)                                         Q1 2012  Q4 2011  Q1 2011
    ----------------------                             -------  -------  -------

    Net Cash from operating
     activities                                            250      137      350
    -----------------------                                ---      ---      ---
    Net Cash from (used in)
     investing activities                                  113       43     (206)
    -----------------------                                ---      ---     ----
    Net Cash used in financing
     activities                                           (225)    (213)    (116)
    --------------------------                            ----     ----     ----
    Net Cash increase (decrease)                           147      (61)      36
    ---------------------------                            ---      ---      ---

    Selected Cash Flow Data (in US$
     millions)                                         Q1 2012  Q4 2011  Q1 2011
    -------------------------------                    -------  -------  -------

    Depreciation & amortization                            288      315      317
    ---------------------------                            ---      ---      ---
    Payment for Capital
     expenditures                                         (125)     (76)    (466)
    -------------------                                   ----      ---     ----
    Dividends paid to stockholders                         (88)     (89)     (62)
    ------------------------------                         ---      ---      ---
    Change in inventories, net                              46      139     (135)
    --------------------------                             ---      ---     ----



     STMicroelectronics N.V.
     CONSOLIDATED BALANCE SHEETS


     As at                                                            March 31,          December 31,          April 2,
     In millions of U.S. dollars                                                   2012                 2011                2011
                                                                     (Unaudited)           (Audited)          (Unaudited)

     ASSETS
     ======
     Current assets:
     Cash and cash equivalents                                                    2,059                1,912               1,928
     Restricted cash                                                                  3                    3                  92
     Short-term deposits                                                              -                    -                  71
     Marketable securities                                                          154                  413                 719
     Trade accounts receivable, net                                                 971                1,046               1,239
     Inventories, net                                                             1,508                1,531               1,671
     Deferred tax assets                                                            170                  141                 191
     Assets held for sale                                                            22                   28                  31
     Other current assets                                                           589                  506                 675
     Total current assets                                                         5,476                5,580               6,617

     Goodwill                                                                     1,064                1,059               1,064
     Other intangible assets, net                                                   608                  645                 715
     Property, plant and equipment, net                                           3,826                3,920               4,350
     Non-current deferred tax assets                                                371                  332                 358
     Restricted cash                                                                  4                    5                   0
     Non-current marketable securities                                                -                    -                  77
     Other long-term investments                                                    116                  121                 159
     Other non-current assets                                                       420                  432                 342
                                                                                  6,409                6,514               7,065
     Total assets                                                                11,885               12,094              13,682

     LIABILITIES AND STOCKHOLDERS' EQUITY
     ====================================
     Current liabilities:
     Bank overdrafts                                                                  -                    7                   -
     Short-term debt                                                              1,076                  733                 717
     Trade accounts payable                                                         781                  656               1,277
     Other payables and accrued liabilities                                         987                  976                 995
     Dividends payable to stockholders                                                -                   88                   -
     Deferred tax liabilities                                                        15                   14                  14
     Accrued income tax                                                              94                   95                 120
     Total current liabilities                                                    2,953                2,569               3,123

     Long-term debt                                                                 366                  826               1,032
     Post-retirement benefit obligations                                            425                  409                 340
     Long-term deferred tax liabilities                                              22                   21                  33
     Other long-term liabilities                                                    275                  273                 313
                                                                                  1,088                1,529               1,718
     Total liabilities                                                            4,041                4,098               4,841
     Commitment and contingencies
     Equity
     Parent company stockholders' equity
      Common stock (preferred stock:
      540,000,000 shares authorized, not
      issued;                                      1,156 1,156 1,156
      common stock: Euro 1.04 nominal value,
      1,200,000,000 shares authorized, 910,559,805
      shares
     issued, 885,000,042 shares outstanding)
     Capital surplus                                                              2,550                2,544               2,523
     Retained earnings                                                            3,328                3,504               3,411
     Accumulated other comprehensive income                                         837                  670               1,222
     Treasury stock                                                                (271)                (271)               (304)
                                                                                   ----                 ----                ----
     Total parent company stockholders' equity                                    7,600                7,603               8,008
     Noncontrolling interest                                                        244                  393                 833
     Total equity                                                                 7,844                7,996               8,841
     Total liabilities and equity                                                11,885               12,094              13,682
                                                                                 ------               ------              ------

SOURCE STMicroelectronics

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