European chipmaker STMicroelectronics N.V. (STM: Quote) on Monday reported a loss for the second quarter on lower revenues and margins. Adjusted loss per share was wider than analysts' expectations, while revenues matched their estimates. However, results improved on a sequential basis from the preceding first quarter.
Looking ahead, the Geneva, Switzerland-based company noted that bookings softened in June as the global economy weakened and is reducing its capital expenditures plan for fiscal 2012 by 25 percent.
Automotive net revenues for the second quarter declined 12 percent to $404 million, while analog, MEMS and Microcontrollers revenues dropped 13 percent to $774 million and Digital revenues decreased 32 percent to $353 million.
Power Discrete revenues declined 22 percent to $262 million and wireless revenues edged down less than 1 percent to $344 million.
STMicroelectronics' second-quarter net loss was $75 million or $0.08 per share, compared to net income of $420 million or $0.46 per share in the year-ago quarter. However, net loss narrowed from $176 million or $0.20 per share in the preceding first quarter.
Excluding impairment, restructuring charges and one-time items, adjusted loss per share for the second quarter was $0.05, compared to adjusted earnings of $0.14 per share in the prior-year quarter.
Net revenue for the quarter declined 16 percent to $2.15 billion from $2.57 billion in the year-ago period, but rose 6.5 percent sequentially.
On average, analysts polled by Thomson Reuters expected the company to report loss of $0.03 per share for the quarter on revenue of $2.15 billion. Analysts' estimates typically exclude special items.
Carlo Bozotti, President and CEO of STMicroelectronics said, "Our second quarter financial results improved on a sequential basis despite a macro-driven change in customer sentiment in June. Thanks to broad-based growth and the continued expansion of our product portfolio into new applications, our second quarter net revenues and gross margin results were in line with our business outlook."
Gross margin declined to 34.3 percent from 38.1 percent in the year-ago period.
Looking ahead to the third quarter, STMicroelectronics forecasts revenues to grow sequentially in the range of about +2.5 percent, plus or minus 3 percentage points. Analysts expect the company to report revenues of $2.31 billion.
Reflecting a similar level of utilization at the company's facilities compared to the second quarter, STMicroelectronics projects gross margin of about 35.3 percent, plus or minus 1.5 percentage points.
Bozotti said, "As we saw during the end of the second quarter, the global economic environment has weakened. As a result, bookings in June softened and remain somewhat volatile."
Bozotti added, "Nonetheless, we continue to expect sequential revenue growth and gross margin improvement with respect to the third quarter, thanks to our new product momentum, in particular in MEMS, microcontrollers and Power MOSFET & IGBT."
For fiscal 2012, STMicroelectronics said it is reducing its capital expenditures plan by about 25 percent to a range of $500 to $600 million.
STM closed Monday's trading at $4.76, down $0.06 or 1.24 percent on a volume of 2.70 million shares.
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by RTT Staff Writer
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