STMicroelectronics made a $132m operating loss in Q4 as revenues fell 10.3% on Q3. On a y-o-y basis revenues decreased 22.6%. Margin fell 2.4% Q4 on Q3, and 6.5% y-o-y.
Q4 revenues were $2.2bn compared to Q3’s $2.4bn, Q4 margin was 33.4% compared to Q3’s 35.8% and the Q4 operating loss of $132m was up on the $23m loss of Q3.
For 2011, ST had revenues of $9.73bn compared to 2010 revenue of $10.35bn and net profit of $650m.
For Q1 2012, ST expects to see a further decline in revenue of between 4% and 10% and a margin of 33%.
ST CEO Carlo Bozotti said: “We believe bookings have bottomed. Looking to the first quarter, we expect billings to bottom, as we see stronger than seasonal billings for ST’s wholly-owned businesses offset by a very significantly weaker revenue performance from ST-Ericsson. “
Q4 sales in America fell 4.6%, Japan & Korea and Greater China & South Asia each were down about 7.5% and EMEA decreased 20.7%.
As ST-Ericsson piles up more debt, now totalling $800m, it is beginning to eat into ST’s resources.
“Exiting the year, our financial resources totaled $2.3bn and our net financial position was about $1.17bn taking into account the 50% of ST-Ericsson’s debt,” Bozotti.
The usual reasons of legacy products and the collapse of sales to Nokia were given for ST-Ericsson’s dire performance.
‘ST, together with our partner Ericsson, is firmly committed to support ST-Ericsson in the transition to turn-over to sustainable profitability and cash generation,’ states the company, ‘as a result of this strategic review we may consider additional actions to solidify and accelerate ST-Ericsson’s path to profitability. In such an event, or in case of a significant worsening of business prospects, the value of ST-Ericsson for ST could decrease to a value significantly lower than the current carrying amount of ST-Ericsson on our books and we may be required to take an impairment charge.’
Bozotti points to good performances in MEMS and automotive. “Our MEMS sales nearly doubled to over $600m,” he says, “our automotive business reported record revenues, with sales up 18% during 2011, on top of sales growth of over 40% during 2010.”
Q4 capex decreased significantly to $76m compared to $384m in Q3 and $423m in Q4 2010.
ST’s net financial position, adjusted taking into account its 50% investment in ST-Ericsson, was a net cash position of $1,167m at December 31, 2011 compared to $1,13m at October 1, 2011 and $1,23m at December 31, 2010.
ST’s cash and cash equivalents, short-term deposits, marketable securities and restricted cash equaled $2.33 billion and total debt, including 100% of ST-Ericsson’s debt, as consolidated by ST, was $1.57bn at December 31, 2011.
