Tuesday, semiconductor company STMicroelectronics NV (STM) reported a third quarter loss that narrowed from a year ago, helped by narrower loss on equity investments. Revenue for the quarter declined from a year ago, but came in above the Street estimate. Looking ahead, the company provided its forecast for the fourth quarter.
The Geneva, Switzerland-based company reported a third quarter net loss attributable to parent company of $201.00 million or $ 0.23 per share, compared to a loss of $289.00 million or $0.32 per share in the year-ago quarter.
Excluding impairment and restructuring charges, ST reported a third quarter adjusted net loss attributable to parent company of $153 million or $0.17 per share, compared to adjusted net income of $134 million or $0.15 per share in the same quarter last year.
On average, four analysts polled by Thomson Reuters expected the company to report a loss of $0.09 per share for the quarter. Analysts estimates typically exclude special items.
Net revenues for the quarter decreased to $2.28 billion from $2.70 billion in the prior-year quarter. Analysts estimated revenues of $2.25 billion for the third quarter.
Among others in the industry, Dallas, Texas-based Texas Instruments Inc. (TXN) reported third quarter earnings that fell 4% from last year, hurt by lower revenue mainly in the Wireless segment. TI's quarterly earnings, excluding items, however came in above analysts' expectations and also forecast third quarter earnings to come in above analysts' estimate.
All market segments decreased, with Industrial down by 35%, Consumer 28%, Automotive 19%, Telecom 8% and Computer down by 5%. Distribution decreased 19% in comparison to the year-ago period reflecting a destocking of this channel and weaker industry conditions.
Automotive/Consumer/Computer/Communication Infrastructure Product Group or ACCI's third quarter net revenues decreased to $852 million from $1.09 billion in the third quarter last year. Industrial and Multisegment Product Sector or IMS' net revenues fell to $694 million from $901 million in the year-ago quarter.
Wireless net revenues rose to $704 million from $696 million in he same quarter of fiscal 2008. The company noted that the net sales growth was higher than normal seasonal patterns,with solid performance in Asia.
Inventory was $1.30 billion at quarter end, down from $1.45 billion at June 28, 2009 and $1.84 billion at December 31, 2008., due to continued low fab loadings and an increase in sales. Inventory turns in the third quarter improved to 4.8 turns compared to 4.1 turns sequentially and 4.0 turns in the year-ago quarter.
In the third quarter of 2009, ST's loss on equity investments was $42 million, compared to $344 million in the year-ago quarter. The loss on equity for the most recent quarter include a charge of $33 million that represents ST's proportional share of the loss reported by Numonyx in its second quarter of 2009.
During the third quarter, the company said that it continued certain ongoing restructuring activities and headcount-reduction programs to streamline its cost structure. The company confirmed that the ongoing $1 billion savings and productivity plan, encompassing manufacturing, the rationalization of sites and capturing synergies in wireless, is on track for completion in mid-2010.
The $250 million cost-synergies program defined by ST-NXP Wireless was substantially completed at the end of the quarter while the $230 million restructuring plan, announced by ST-Ericsson on April 29, 2009 and currently in progress, had a limited benefit to the third quarter results.
Related to the its cost-realignment initiatives, STMicroelectronics posted third quarter restructuring and impairment charges of $53 million, of which $17 million are related to ST-Ericsson, compared to $86 million and $22 million in the prior quarter and year-ago period, respectively.
For the nine-month period, net loss attributable to the parent company was $1.06 billion or $1.21 per share, compared to a loss of $421 million or $0.47 per share in the similar period last year.
Net revenues for the nine-month period fell to $5.93 billion from $7.57 billion in the comparable period of 2008.
Looking forward to the fourth quarter, the company expects a stronger than seasonal revenue growth pattern evolving for the company. Based on current booking activity and visibility, the company expects to register a sequential net revenue growth between about 5% and 12%.
The company also expect a further significant sequential improvement in our gross margin to about 36.5%, plus or minus 1.5 percentage points.
STMicroelectronics closed Tuesday's regular trading session at $9.74, down 5 cents or 0.51%, on a volume of 1.63 million shares. However, the stock gained 36 cents or 3.70%, trading at $10.10 in after hours.
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