ST still in the red – but improving

Fourth quarter net revenues totaled USD 2.01 billion, gross margin was 32.9%. For the full year net revenues totaled USD 8.08 billion, gross margin was 32.3%. “Fourth quarter revenue and gross margin results were well in line with our outlook range, coming in at the mid-point of our guidance, which translated into positive operating income before impairment and restructuring and a substantial positive free cash flow,” said ST President and CEO Carlo Bozotti. Fourth Quarter Overall, net revenues as reported increased 0.1% sequentially and decreased 6.8% on a year-over-year basis. On a sequential basis by region of shipment, Greater China & South Asia posted growth of 4.1%, while Japan & Korea, the Americas, and EMEA decreased by 5.6%, 2.8%, and 1.0%, respectively. Fourth quarter gross profit was USD 662 million and gross margin was 32.9%. On a sequential basis, gross margin increased 50 basis points, primarily due to manufacturing efficiencies partially offset by negative currency effects and, as anticipated, unsaturation charges. Fourth quarter operating income, before impairment and restructuring charges, was USD 18 million compared to USD 54 million in the prior quarter, which included an USD 80 million gain from the sale of businesses. Operating margin in the fourth quarter, before impairment and restructuring charges, was 0.9% with Sense & Power and Automotive (SP&A) operating margin at 7.7% and Embedded Processing Solutions (EPS) at negative 8.5%. Operating margin improved from negative 6.5% in the year-ago quarter mainly due to the split up of ST-Ericsson. Fourth quarter net loss was USD 36 million or USD (0.04) per share, compared to a net loss of USD (0.16) and USD (0.48) per share in the prior and year-ago quarter, respectively. Full Year 2013 Results During 2013, ST and Ericsson split up the ST-Ericsson joint venture, thus exiting the wireless IC platform business. Net revenues for the full year 2013 decreased 4.8% to USD 8.08 billion from USD 8.49 billion in 2012 mainly reflecting lower WPS (former ST-Ericsson products) sales. Net revenues for the full year 2013, excluding WPS, increased 3.2% to USD 7.38 billion. Gross margin was 32.3% of net revenues for the full year 2013, compared to 32.8% of net revenues in 2012. Net loss, as reported, was USD 500 million in the full year 2013, compared to a net loss of USD1.16 billion in the full year 2012.