Semiconductor products company STMicroelectronics NV (STM), Tuesday reported a net loss for the fourth quarter that narrowed from last year, due to the absence of charges recorded a year-ago. Adjusted earnings, as well as revenues for the quarter exceeded analysts' expectations.
The Geneva, Switzerland-based company posted a net loss attributable to parent company of $70 million or $0.08 per share for the fourth quarter, compared to a net loss of $366 million or $0.42 per share in the prior year quarter.
Excluding impairment and restructuring and other-than-temporary-impairment charges, adjusted net income was $36 million or $0.04 per share, compared to a loss of $57 million or $0.06 per share in the year-ago quarter.
On average, 5 analysts polled by Thomson Reuters expected the company to report earnings of $0.02 per share for the fourth quarter. Analysts' estimates typically exclude special items.
Fourth quarter net revenues increased to $2.58 billion from $2.28 billion in the same quarter last year. Three analysts had a consensus revenue estimate of $2.56 billion for the fourth quarter.
ST President and CEO, Carlo Bozotti, said, "ST's fourth quarter financial results reflect a positive finish to a very difficult year for ST, the semiconductor industry and the global economy."
All market segments posted growth, with Automotive up 23%, Telecom 17%, Computer 37%, and Distribution by 12% over last year, reflecting the realignment of stock with demand and improved industry conditions. However, Consumer segment was down 11%, and Industrial segment was down by 7%.
Net revenues from Automotive/Consumer/Computer/Communication Infrastructure Product Groups increased 11% to $997 million, Industrial and Multisegment Product Sector's net revenues grew 8% to $854 million, and Wireless net revenues improved 24% to $712 million over last year.
As a percentage of revenue, gross margin improved to 37.0% from 36.1% in the previous year quarter.
Total operating expenses for the fourth quarter increased to $963 million from $961 million in the prior year quarter.
Inventory was $1.28 billion at the quarter end, down from $1.84 billion at December 31, 2008. Inventory turns in the fourth quarter improved to a record 5.1 turns, compared to 3.1 turns in the year-ago quarter.
On January 14, ST completed a program to repurchase about 30.6% of its 2016 convertible bonds. ST paid $314.6 million in outstanding cash to repurchase the bonds out of which $103 million was paid in the fourth quarter.
During the quarter, ST announced changes in its global sales and marketing organization, consolidating its Asian regions into two: Greater China & South Asia and Japan & Korea. The company said the moves will be effective January 1, 2010.
The company also moved its U.S. headquarters to Coppell, Texas. The headquarters will house much of the company's US administrative offices as well as some product division management functions and sales and marketing staff.
For fiscal 2009, ST reported a net loss attributable to parent company of $1.13 billion or $1.29 per share, compared to a net loss of $786 million or $0.88 per share in the previous year.
On an adjusted basis, net loss was $627 million or $0.72 per share for the year 2009.
Annual net revenues decreased to $8.51 billion from $9.84 billion in the prior year. The results included $299 million in Flash revenues that were deconsolidated on March 30, 2008.
Analysts expected the company report a loss of $0.73 per share on revenue of $8.44 billion for the year 2009.
For the first quarter, ST anticipates a sequential net revenue decrease in the range of 7% to 13%, which equates to a positive 35% to 45% when compared to last year. The Street expects revenue of $2.23 billion for the first quarter.
Among others in the industry, Texas Instruments Inc. (TXN) reported that its profit for the fourth-quarter surged significantly over last year, helped by strong demand across end markets without the usual holiday slowdown, with higher gross profit margins and benefit associated with higher utilization of manufacturing assets.
ST closed Tuesday's regular trading session at $8.50, up 5 cents on a volume of 3.02 million shares. The stock has been moving in a range of $3.73 - $10.28 for the past 52 weeks, with an average daily volume of about 2.02 million shares for the past three months.
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