© ST-Ericsson Components | October 20, 2011

ST-Ericsson with operating loss in 3Q/2011

ST-Ericsson, a joint venture of STMicroelectronics and Ericsson, reported an operating loss of USD 194 million for the third fiscal quarter (ending October 1, 2011). Net sales were USD 412 million, which includes IP licensing to a third party.
"Sales in the third quarter came in slightly ahead of expectations, even when excluding $20 million of revenue from IP licensing to a third party," said Gilles Delfassy, president and CEO of ST-Ericsson. "Revenue from new products continued to grow, making up more than half of our total sales.

"We continue to make progress on having more devices in the market with ST-Ericsson inside. The first smartphone using one of our NovaThor(TM) platforms has ramped in the market - the HTC Sensation Z710t for China Mobile. There are also several new smartphone models in the market based on our Thor(TM) modem technology.

"Our financial performance continues to be challenging, but in addition to growing sales from new products, we're on plan to execute the cost-saving measures announced in June, and we continue to make improvements within our organization to achieve greater efficiencies.

"With our new platforms starting to ramp in volume, we look forward to seeing more and more the benefits as we go into production in the coming quarters with several of the world's largest smartphone and tablet makers."

2011 third quarter financial summary (unaudited)

© ST-Ericsson

The net financial position at the end of the third quarter was negative USD 594 million. The sequential decrease, mainly due to the operating loss, was mitigated by actions to accelerate the cash conversion cycle and reduce working capital. During the third quarter the company sold trade receivables without recourse, of which USD 162 million were outstanding at the end of the quarter, representing a sequential decrease of USD 17 million.

Inventory decreased by USD 37 million reaching USD 281 million at the end of the third quarter.


For the fourth quarter 2011, ST-Ericsson expects net sales to be slightly up sequentially.
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