Telecom News --
ST-Ericsson reports second quarter 2010 financial results
Geneva, Switzerland, 22 July, 2010
- Net sales $544 million; 10% sequential decrease
- Adjusted operating loss[1] $118 million
- Restructuring plans on track
ST-Ericsson, a joint venture of STMicroelectronics (NYSE:STM) and Ericsson (NASDAQ:ERIC), reported financial results for the second fiscal quarter ending June 26, 2010.
President and CEO, Gilles Delfassy, commented: "Our performance in the quarter was the result of both lower sales and our continued tight control of costs. Our restructuring plans are fully on track and we managed to mitigate the impact of the lower level of revenues in the quarter on our operating loss.
"Our sales in the quarter continued to reflect the impact of our ongoing portfolio transition, combined with weaker-than-expected performance in Asia and some supply limitations. We are, however, encouraged by the progress made by the new portfolio with our customers. Our smartphone platform family has achieved design wins for multiple models with four customers, and we continue to see good traction for our high-value entry and modem portfolio.
"The transformation of our company is under way and, although we haven't captured the benefits yet, we are convinced we are on the right track and we are fully determined to complete the process that we have started."
Second quarter 2010 financial highlights (unaudited)
$ million |
Q2 2010 |
Q1 2010 |
Q2 2009 |
Income Statement |
|
|
|
NET SALES |
544 |
606 |
666 |
OPERATING INCOME/(LOSS) ADJUSTED[1] for: |
(118) |
(114) |
(165) |
- amortization of acquisition-related intangibles |
(25) |
(24) |
(24) |
- restructuring charges |
(5) |
(27) |
(35) |
OPERATING INCOME / (LOSS) as reported |
(148) |
(164) |
(224) |
NET INCOME / (LOSS) |
(139) |
(154) |
(213) |
Net sales decreased by 10 percent sequentially, reflecting the continued portfolio transition, a weaker-than-expected performance in Asia and some supply limitations, which were only partially offset by a positive performance by certain EDGE products.
The operating loss increased sequentially by $4 million; the impact of the lower level of revenues was mitigated by the positive effects of the cost savings generated in the quarter.
Inventory increased by $32 million, reaching $262 million at the end of the second quarter, reflecting the lower than expected level of sales in some product families.
Net cash[2] was $43 million at the end of the second quarter of 2010. During the quarter the company sold trade receivables without recourse, of which $67 million were outstanding at the end of the quarter. The cash outflow was due to the operating loss and payments related to the restructuring.
-end-
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