|
·
|
Second quarter net revenues up 1.3% sequentially to $2.57 billion
|
|
·
|
Gross margin of 38.1%
|
|
·
|
Second quarter net income of $420 million; first half net income of $590 million
|
(In Million US$)
|
Q2 2011
|
Q1 2011
|
Q2 2010
|
Net Revenues(a)
|
2,567
|
2,535
|
2,531
|
Gross Margin
|
38.1%
|
39.1%
|
38.3%
|
Operating Income, as reported
|
83
|
118
|
91
|
Non-U.S. GAAP Operating Income before restructuring*
|
114
|
142
|
103
|
Non-U.S. GAAP Operating Margin before restructuring*
Non-U.S. GAAP Attributable to ST*
|
4.4%
9.1%
|
5.6%
9.9%
|
4.1%
7.7%
|
Net income
|
420
|
170
|
356
|
Net Revenues By Market Segment / Channel (*)
(In %) |
Q2 2011
|
Q1 2011
|
Q2 2010
|
Market Segment / Channel:
|
|||
Automotive
|
17%
|
17%
|
14%
|
Computer
|
14%
|
14%
|
12%
|
Consumer
|
9%
|
11%
|
13%
|
Industrial & Other
|
10%
|
8%
|
8%
|
Telecom
|
25%
|
26%
|
32%
|
Total OEM
|
75%
|
76%
|
79%
|
Distribution
|
25%
|
24%
|
21%
|
Operating Segment
(In Million US$) |
Q2 2011
Net Revenues |
Q2 2011
Operating Income (Loss) |
Q1 2011
Net Revenues |
Q1 2011
Operating Income (Loss) |
Q2 2010
Net Revenues |
Q2 2010
Operating Income (Loss) |
ACCI (a)
|
1,118
|
122
|
1,052
|
116
|
1,022
|
100
|
AMM (a)
|
751
|
159
|
755
|
166
|
637
|
99
|
PDP
|
337
|
40
|
333
|
50
|
331
|
37
|
Wireless (b)
|
347
|
(207)
|
384
|
(180)
|
525
|
(137)
|
Others (c)(d)
|
14
|
(31)
|
11
|
(34)
|
16
|
(8)
|
TOTAL
|
2,567
|
83
|
2,535
|
118
|
2,531
|
91
|
In Million US$
|
First Half 2011
|
First Half 2010
|
||
Product Segment
|
Net Revenues
|
Operating
Income
(Loss)
|
Net Revenues
|
Operating
Income
(Loss)
|
ACCI
|
2,170
|
237
|
1,915
|
149
|
AMM
|
1,505
|
325
|
1,183
|
164
|
PDP
|
670
|
90
|
612
|
62
|
Wireless
|
731
|
(386)
|
1,112
|
(253)
|
Others
|
25
|
(65)
|
34
|
(51)
|
TOTAL
|
5,101
|
201
|
4,856
|
71
|
|
·
|
The reappointment of Mr. Carlo Bozotti as the sole member of the Managing Board and the Company’s President and Chief Executive Officer for a three-year term expiring at the 2014 Annual General Meeting;
|
|
·
|
The reappointment for a three-year term, expiring at the 2014 Annual General Meeting, of the following members of the Supervisory Board: Mr. Didier Lombard, Mr. Bruno Steve and Mr. Tom de Waard;
|
|
·
|
The appointment of Messrs. Jean d’Arthuys, Jean-Georges Malcor and Alessandro Rivera as new members of the Supervisory Board for a three-year term, expiring at the 2014 Annual General Meeting;
|
|
·
|
Approval of the Company's 2010 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.
|
|
·
|
Earned a key design win for a dual-clutch transmission controller with a major European manufacturer who supplies directly to the auto companies (tier-ones). The dual clutch is anticipated to be an important contributor to reducing fuel consumption.
|
|
·
|
Achieved a major design win with a key tier-one manufacturer in a power-steering application for a super-integrated ASIC, manufactured in ST’s highly reliable BCD8 Automotive process, that will be used by many Japanese car makers.
|
|
·
|
Unique TeseoII, which concurrently receives satellite signals from both the GPS- and Glonass-system satellites for improved global positioning, was selected for a Telematics Box application.
|
|
·
|
Began delivering the SPEAr1340 dual-core ARM Cortex-A9 microprocessor family, which integrates hardware graphics and video processing capabilities, to provide outstanding multimedia performance.
|
|
·
|
Collected multiple design wins, including one for the graphical user interface from a leading printer manufacturer, for SPEAr-family devices.
|
|
·
|
Contributed to protecting the health of consumers from food-borne pathogens, with Veredus Labs’ launch of VereFoodborne. The product uses ST’s Lab-on-Chip platform to detect the pathogens.
|
|
·
|
Earned a key design win with Ciena, one of the world leaders in networking, for an ASIC manufactured in 32nm process technology for a Metropolitan Area Network application.
|
|
·
|
Gained multiple new design wins of 'Freeman-iDTV System-on-Chip' with ODM/OEM customers for Europe & UK digital TV markets. The ‘Freeman’ family offers highly integrated 3D, Motion-Judder reduction, Connected-TV functions and Faroudja video processing.
|
|
·
|
Successfully enabled a TV ODM to begin mass production of its 100Hz integrated digital TV (iDTV) product line-up for European Digital Video Broadcast CI+ market with a complete system-platform solution based on the Freeman-Premier iDTV SoC.
|
|
·
|
Introduced new “Athena” multi-media monitor SoC family as the first to support the DisplayPort 1.2 digital display interface format plus HDMI 1.4 and first-of-their-kind features such as multi-stream, multi-monitor functions.
|
|
·
|
Introduced two MEMS Digital Microphones that address computer and mobile market applications by offering real high-fidelity audio bandwidth, flat frequency response in the full audio band, and an unparalleled sound quality and immunity to power-supply noise.
|
|
·
|
Won an important socket in a next-generation smartphone from a significant US manufacturer with a 3-Axis 20kHz Digital Gyroscope.
|
|
·
|
Started production of a solar battery charger for mobile phones and other small portable devices based on an innovative technique, for collecting the maximum possible energy from solar cells.
|
|
·
|
Earned a design win for a power-over-Ethernet IC in an IP phone from a market-leading supplier.
|
|
·
|
Set a new memory density record with its 2-Mbit serial EEPROM chips suited for write-intensive applications, including smart meters and medical equipment.
|
|
·
|
Achieved design wins of its highly secure 90nm 32-bit MCUs for the latest Trusted Platform Modules at major PC OEMs.
|
|
·
|
Won a major design for its STM32F microcontrollers in an application for a multi-utility controller at a leading smart-metering OEM in the UK.
|
|
·
|
Expanded its capabilities in Convergent Home Networking and Smart Grid with additional IP and talent targeting HomePlug wideband powerline communications.
|
|
·
|
Extended its Power MOSFET family with high-efficiency devices that bring energy-saving advantages to solar, telecom and consumer applications; achieved an important design win for a micro-inverter with a large customer in the US.
|
|
·
|
Gained multiple design wins from top-five portable broadband-application manufacturers for Integrated Passive Devices that deliver best-in-class RF performance in wireless and portable broadband solutions, including Bluetooth, WLAN, GPS and WiMax.
|
|
·
|
Products
|
|
o
|
Launched the Thor M5780 21Mbps, tailored for smartphones and 30 percent smaller than previous modem solutions.
|
|
·
|
Customers
|
|
o
|
As of the end of first quarter, Ericsson had approximately 100 design wins for notebooks and netbooks and 25 design wins for tablets with modules using ST-Ericsson modems, with the majority based on the Thor M57xx 21Mbps family.
|
|
o
|
Samsung selected the Thor M5720 modem to underpin the Samsung Infuse™ 4G smartphones launched with AT&T in the US.
|
|
o
|
In June T-Mobile USA introduced the Samsung Exhibit™ 4G which is underpinned by ST-Ericsson´s 21Mbps Thor modem.
|
|
o
|
All new Panasonic Toughbook™ computers will feature Ericsson's mobile broadband module, based on the ST-Ericsson Thor 21Mbps modem.
|
|
·
|
Changes in demand in the key application markets and 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;
|
|
·
|
in periods of reduced demand or visibility on orders our ability to reduce our expenses as required and to operate our manufacturing facilities at sufficient levels to cover fixed operating costs, as well as our ability, in the case of increased demand, to ramp up production efficiently;
|
·
|
the operations of the ST-Ericsson wireless joint venture, which represent an over $2 billion investment and risk for our business, are currently in a transition from legacy to new products and facing a dramatic change in their major customer business. Consequently, ST-Ericsson has been incurring significant losses. In the event of a significant worsening of the current market conditions or a lack of results, the value of ST-Ericsson for ST could decrease to a value lower than the current carrying amount of the investment on our books;
|
|
·
|
our ability, in an intensively competitive environment, to successfully develop and secure customer acceptance and 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;
|
|
·
|
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, and 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
|
|
·
|
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 (in particular, the aftermath of the events in Japan), 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.
|
Q2 2011
(US$ millions and cents per share)
|
Gross Profit
|
Operating Income
|
Net Earnings
|
Corresponding EPS (diluted)
|
U.S. GAAP
|
977
|
83
|
420
|
0.46
|
Impairment & Restructuring
|
31
|
24
|
||
Realized gain on financial assets
|
(323)
|
|||
Estimated Income Tax Effect
|
5
|
|||
Non-U.S GAAP
|
977
|
114
|
126
|
0.14
|
Q1 2011
(US$ millions and cents per share)
|
Gross Profit
|
Operating Income
|
Net Earnings
|
Corresponding 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
|
Q2 2010
(US$ millions and cents per share)
|
Gross Profit
|
Operating Income
|
Net Earnings
|
Corresponding EPS (diluted)
|
U.S. GAAP
|
968
|
91
|
356
|
0.39
|
Impairment & Restructuring
|
12
|
8
|
||
Equity Investment Divestiture
|
(265)
|
|||
Estimated Income Tax Effect
|
60
|
|||
Non-U.S GAAP
|
968
|
103
|
159
|
0.18
|
Net Financial Position (in US$ millions)
|
July 2,
2011
|
April 2,
2011
|
June 26,
2010
|
Cash and cash equivalents, net of bank overdrafts
|
2,355
|
1,928
|
1,268
|
Marketable securities, current
|
426
|
719
|
1,094(a)
|
Short-term deposits
|
151
|
71
|
62
|
Restricted cash
|
3
|
92
|
-
|
Non-current restricted cash
|
5
|
-
|
250
|
Marketable securities, non-current
|
-
|
77
|
57
|
Total financial resources
|
2,940
|
2,887
|
2,731
|
Short-term borrowings and current portion of
long-term debt
|
(825)
|
(717)
|
(802)
|
Long-term debt
|
(1,045)
|
(1,032)
|
(1,227)
|
Total financial debt
|
(1,870)
|
(1,749)
|
(2,029)
|
Net financial position
|
1,070
|
1,138
|
702
|
Free cash flow (in US$ millions)
|
Q2 2011
|
Q1 2011
|
Q2 2010
|
Net cash from operating activities
|
117
|
350
|
361
|
Net cash from (used in) investing activities
|
289
|
(206)
|
(300)
|
Payment for purchases of (proceeds from sale of) current and non-current marketable securities, investment in (proceeds from) short-term deposits and restricted cash, net
|
(656)
|
(93)
|
151
|
Free cash flow
|
(250)
|
51
|
212
|
As at
|
July 2,
|
April 2,
|
December 31,
|
|||||||||
In million of U.S. dollars
|
2011
|
2011
|
2010
|
|||||||||
(Unaudited)
|
(Unaudited)
|
(Audited)
|
||||||||||
ASSETS
|
||||||||||||
Current assets:
|
||||||||||||
Cash and cash equivalents
|
2,355 | 1,928 | 1,892 | |||||||||
Restricted cash
|
3 | 92 | 7 | |||||||||
Short-term deposits
|
151 | 71 | 67 | |||||||||
Marketable securities
|
426 | 719 | 1,052 | |||||||||
Trade accounts receivable, net
|
1,302 | 1,239 | 1,230 | |||||||||
Inventories, net
|
1,755 | 1,671 | 1,497 | |||||||||
Deferred tax assets
|
171 | 191 | 218 | |||||||||
Assets held for sale
|
28 | 31 | 28 | |||||||||
Other receivables and assets
|
749 | 675 | 609 | |||||||||
Total current assets
|
6,940 | 6,617 | 6,600 | |||||||||
Goodwill
|
1,079 | 1,064 | 1,054 | |||||||||
Other intangible assets, net
|
715 | 715 | 731 | |||||||||
Property, plant and equipment, net
|
4,508 | 4,350 | 4,046 | |||||||||
Long-term deferred tax assets
|
378 | 358 | 329 | |||||||||
Equity investments
|
116 | 131 | 133 | |||||||||
Restricted cash
|
5 | - | - | |||||||||
Non-current marketable securities
|
- | 77 | 72 | |||||||||
Other investments and other non-current assets
|
429 | 370 | 384 | |||||||||
7,230 | 7,065 | 6,749 | ||||||||||
Total assets
|
14,170 | 13,682 | 13,349 | |||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY
|
||||||||||||
Current liabilities:
|
||||||||||||
Short-term borrowings and current portion of long-term debt
|
825 | 717 | 720 | |||||||||
Trade accounts payable
|
1,310 | 1,277 | 1,233 | |||||||||
Other payables and accrued liabilities
|
1,030 | 995 | 1,004 | |||||||||
Dividends payable to shareholders
|
265 | - | 62 | |||||||||
Deferred tax liabilities
|
18 | 14 | 7 | |||||||||
Accrued income tax
|
122 | 120 | 96 | |||||||||
Total current liabilities
|
3,570 | 3,123 | 3,122 | |||||||||
Long-term debt
|
1,045 | 1,032 | 1,050 | |||||||||
Reserve for pension and termination indemnities
|
351 | 340 | 326 | |||||||||
Long-term deferred tax liabilities
|
28 | 33 | 59 | |||||||||
Other non-current liabilities
|
337 | 313 | 295 | |||||||||
1,761 | 1,718 | 1,730 | ||||||||||
Total liabilities
|
5,331 | 4,841 | 4,852 | |||||||||
Commitment and contingencies
|
||||||||||||
Equity
|
||||||||||||
Parent company shareholders' 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, 910,544,805 shares
|
||||||||||||
issued, 884,345,239 shares outstanding)
|
||||||||||||
Capital surplus
|
2,531 | 2,523 | 2,515 | |||||||||
Accumulated result
|
3,451 | 3,411 | 3,241 | |||||||||
Accumulated other comprehensive income
|
1,245 | 1,222 | 979 | |||||||||
Treasury stock
|
(277 | ) | (304 | ) | (304 | ) | ||||||
Total parent company shareholders' equity
|
8,106 | 8,008 | 7,587 | |||||||||
Noncontrolling interest
|
733 | 833 | 910 | |||||||||
Total equity
|
8,839 | 8,841 | 8,497 | |||||||||
Total liabilities and equity
|
14,170 | 13,682 | 13,349 |
SELECTED CASH FLOW DATA
|
||||||||||||
Cash Flow Data (in US$ millions)
|
Q2 2011 | Q1 2011 | Q2 2010 | |||||||||
Net Cash from operating activities
|
117 | 350 | 361 | |||||||||
Net Cash from (used in) investing activities
|
289 | (206 | ) | (300 | ) | |||||||
Net Cash from (used in) financing activities
|
18 | (116 | ) | (167 | ) | |||||||
Net Cash increase (decrease)
|
427 | 36 | (155 | ) | ||||||||
Selected Cash Flow Data (in US$ millions)
|
Q2 2011 | Q1 2011 | Q2 2010 | |||||||||
Depreciation & amortization
|
322 | 317 | 309 | |||||||||
Payment for Capital expenditures
|
(332 | ) | (466 | ) | (134 | ) | ||||||
Dividends paid to shareholders
|
(89 | ) | (62 | ) | (62 | ) | ||||||
Change in inventories, net
|
(64 | ) | (135 | ) | (75 | ) |
Three Months Ended
|
||||||||
(Unaudited)
|
(Unaudited)
|
|||||||
July 2,
|
June 26,
|
|||||||
2011
|
2010
|
|||||||
Net sales
|
2,545 | 2,507 | ||||||
Other revenues
|
22 | 24 | ||||||
NET REVENUES
|
2,567 | 2,531 | ||||||
Cost of sales
|
(1,590 | ) | (1,563 | ) | ||||
GROSS PROFIT
|
977 | 968 | ||||||
Selling, general and administrative
|
(316 | ) | (302 | ) | ||||
Research and development
|
(579 | ) | (593 | ) | ||||
Other income and expenses, net
|
32 | 30 | ||||||
Impairment, restructuring charges and other related closure costs
|
(31 | ) | (12 | ) | ||||
Total Operating Expenses
|
(894 | ) | (877 | ) | ||||
OPERATING INCOME
|
83 | 91 | ||||||
Realized gain on financial assets
|
323 | - | ||||||
Interest income (expense), net
|
(3 | ) | 1 | |||||
Loss on equity investments and gain on investment divestiture
|
(9 | ) | 264 | |||||
Loss on financial instruments, net
|
- | (8 | ) | |||||
INCOME BEFORE INCOME TAXES
|
394 | 348 | ||||||
AND NONCONTROLLING INTEREST
|
||||||||
Income tax expense
|
(83 | ) | (66 | ) | ||||
INCOME BEFORE NONCONTROLLING INTEREST
|
311 | 282 | ||||||
Net loss attributable to noncontrolling interest
|
109 | 74 | ||||||
NET INCOME ATTRIBUTABLE TO PARENT COMPANY
|
420 | 356 | ||||||
EARNINGS PER SHARE (BASIC) ATTRIBUTABLE TO PARENT COMPANY SHAREHOLDERS
|
0.48 | 0.40 | ||||||
EARNINGS PER SHARE (DILUTED) ATTRIBUTABLE TO PARENT COMPANY SHAREHOLDERS
|
0.46 | 0.39 | ||||||
NUMBER OF WEIGHTED AVERAGE
|
||||||||
SHARES USED IN CALCULATING
|
||||||||
DILUTED EARNINGS PER SHARE
|
907.0 | 912.1 |
Six Months Ended
|
||||||||
(Unaudited)
|
(Unaudited)
|
|||||||
July 2,
|
June 26,
|
|||||||
2011
|
2010
|
|||||||
Net sales
|
5,068 | 4,818 | ||||||
Other revenues
|
33 | 38 | ||||||
NET REVENUES
|
5,101 | 4,856 | ||||||
Cost of sales
|
(3,134 | ) | (3,011 | ) | ||||
GROSS PROFIT
|
1,967 | 1,845 | ||||||
Selling, general and administrative
|
(628 | ) | (583 | ) | ||||
Research and development
|
(1,141 | ) | (1,189 | ) | ||||
Other income and expenses, net
|
58 | 43 | ||||||
Impairment, restructuring charges and other related closure costs
|
(55 | ) | (45 | ) | ||||
Total Operating Expenses
|
(1,766 | ) | (1,774 | ) | ||||
OPERATING INCOME
|
201 | 71 | ||||||
Other-than-temporary impairment charge and realized gain on financial assets
|
318 | - | ||||||
Interest income (expense), net
|
(18 | ) | 4 | |||||
Loss on equity investments and gain on investment divestiture
|
(15 | ) | 259 | |||||
Gain (loss) on financial instruments, net
|
22 | (11 | ) | |||||
INCOME BEFORE INCOME TAXES
|
508 | 323 | ||||||
AND NONCONTROLLING INTEREST
|
||||||||
Income tax expense
|
(114 | ) | (55 | ) | ||||
INCOME BEFORE NONCONTROLLING INTEREST
|
394 | 268 | ||||||
Net loss attributable to noncontrolling interest
|
196 | 145 | ||||||
NET INCOME ATTRIBUTABLE TO PARENT COMPANY
|
590 | 413 | ||||||
EARNINGS PER SHARE (BASIC) ATTRIBUTABLE TO PARENT COMPANY SHAREHOLDERS
|
0.67 | 0.47 | ||||||
EARNINGS PER SHARE (DILUTED) ATTRIBUTABLE TO PARENT COMPANY SHAREHOLDERS
|
0.65 | 0.46 | ||||||
NUMBER OF WEIGHTED AVERAGE
|
||||||||
SHARES USED IN CALCULATING
|
||||||||
DILUTED EARNINGS PER SHARE
|
907.2 | 913.2 |
STMicroelectronics N.V.
|
||||
Date:
|
July 26, 2011
|
By:
|
/s/ Carlo Ferro
|
|
Name:
|
Carlo Ferro
|
|||
Title:
|
Executive Vice President and
Chief Financial Officer |