ST-Ericsson reports fourth quarter 2009 financial results
(Thomson Reuters ONE) - * Net sales $740 million; 2% sequential increase * Adjusted operating loss[1] $50 million * Restructuring plans on track, additional $115 million savings announced in DecemberGeneva, Switzerland, January 22, 2010 - ST-Ericsson, a joint venture ofSTMicroelectronics (NYSE:STM) and Ericsson (NASDAQ:ERIC), reports financialresults for the fourth quarter 2009.President and CEO, Gilles Delfassy, commented: "In the fourth quarter, we gainedfurther momentum in one of the fastest growing markets, China, where we are theclear leader in its standard TD-SCDMA, having delivered more than 6.5 millionchipsets by the end of December 2009. In addition, we have taken further actionsto improve our financial performance and increase our competitiveness.2009 has been a challenging year for our industry. For ST-Ericsson, thechallenge was especially great. We had to strive to maintain our positioning,while also setting the foundations for sustainable and profitable growth. Wewill achieve this by rapidly integrating the businesses we have merged and bytransitioning to the new portfolio strategy we devised for our next generationoffering. During its first year, the company has made good progress in allareas, but more still needs to be done.Our industry is evolving to embrace a wider multimedia ecosystem; the mobileplatform has now become the convergence point for most consumer electronics,changing consumers' lives and opening up new opportunities even outside thetraditional handset market. We are well positioned to remain a leading player,thanks to the combination of our advanced modem expertise and multimediaprocessing capabilities. We will build on these strengths to prepare the companyfor future, profitable growth."Fourth quarter 2009 financial highlights (unaudited) Q3 2009 Q4 2008 $ million Q4 2009 PRO-FORMA Income Statement NET SALES 740 728 746 OPERATING INCOME/(LOSS) ADJUSTED[1] for: (50) (77) (98) - amortization of acquisition-related intangibles (27) (25) (25) - restructuring charges (62) (19) (4) OPERATING INCOME / (LOSS) as reported (139) (121) (127) NET INCOME / (LOSS) (125) (112) NANet sales reported a 2% sequential increase driven by continued demand in China.The operating loss of $50 million, excluding amortization of acquisition-relatedintangibles and restructuring charges, compares to a $77 million operating lossreported in the third quarter 2009 and it reflects reduced operating expenses.Inventory management continued to produce positive results thanks to improvedefficiency in the supply chain. Inventory declined by $33 million, reaching alevel of $244 million at the end of the quarter.Net cash[2] was $229 million at the end of fourth quarter 2009, a sequentialincrease of $13 million, including improved working capital and a one-timepayment of $53 million from parent companies related to final merger transactionadjustments already planned since the inception of the company.Update on restructuring plansThe $250 million cost synergies program defined by ST-NXP Wireless is now fullycompleted.The $230 million savings restructuring plan, announced on April 29 2009 and dueto be completed by the second quarter of 2010, is currently in progress and itseffects in the fourth quarter 2009 have been in line with plans.On December 3 2009, ST-Ericsson announced its proposed plan to further improvefinancial performance and increase competitiveness in the market.This plan is targeting additional annualized savings of $115 million that areexpected to come from reductions in operating expenses and spending, along withan extensive R&D efficiency program. As part of this effort, the company is alsoconducting a global workforce review which may affect up to an additional 600employees worldwide. The targeted time of completion of this plan is end of2010.The company estimates that the remaining costs associated with the ongoingrestructuring plans will be incurred within 2010.Market evolutionWhile medium term visibility is somewhat limited, first quarter 2010 is expectedto be characterized by the usual market seasonal decline.Q4 2009 highlights - products, technology and winsLG Electronics selected ST-Ericsson's mobile HSPA broadband modem, M340 to powerthe LG GW990 mobile internet device which will be launched in the second half of2010. The M340 is part of the mobile platforms solution, together with theIntel Moorestown solution. The M340 is a small, flexible modem solution with lowpower consumption enabling high speed internet access.Nokia and ST-Ericsson announced a long-term partnership in the area of TD-SCDMAtechnology and solutions. The partnership will see Nokia using ST-Ericsson as akey supplier of chipset platforms in its Symbian based TD-SCDMA devices andsolutions portfolio.ST-Ericsson, together with Ericsson, announced the companies successfullyachieved first mobility between LTE and HSPA networks, using a multimodeLTE/HSPA device powered by ST-Ericsson's M710 platform.In October, the company announced cooperation with ARM to accelerate innovationin mobile user experience. ST-Ericsson's U8500 is the first smartphone platformto integrate a Mali-400TM graphics processing unit providing access to aleading-edge environment for graphics developers. Financial results appendixPro-forma information: 2009 vs. 2008 (unaudited)[3] 2009 2009 2008 $ million ACTUAL PRO-FORMA PRO-FORMA Income Statement NET SALES 2524 2695 3,577 OPERATING INCOME/(LOSS) ADJUSTED[1] for: (369) (440) (297) - amortization of acquisition-related intangibles (96) (106) (100) - restructuring charges (116) (116) (4) OPERATING INCOME / (LOSS) as reported (581) (662) (401) NET INCOME / (LOSS) (539) (612) NA2009 by quarter (unaudited)[3] Q1 2009 Q1 2009 Q2 2009 Q3 2009 Q4 2009 $ million ACTUAL PRO-FORMA Income Statement NET SALES 391 562 666 728 740 OPERATING INCOME/(LOSS) ADJUSTED[1] for: (78) (149) (165) (77) (50) - amortization of acquisition-related intangibles (20) (30) (24) (25) (27) - restructuring charges 0 0 (35) (19) (62) OPERATING INCOME / (LOSS) as reported (98) (179) (224) (121) (139) NET INCOME / (LOSS) (89) NA (213) (112) (125)Pro-forma information: 2008 by quarter (unaudited)[3] Q1 2008 Q2 2008 Q3 2008 Q4 2008 $ million PRO-FORMA PRO-FORMA PRO-FORMA PRO-FORMA Income Statement NET SALES 862 966 1003 746 OPERATING INCOME/(LOSS) ADJUSTED[1] for: (96) (69) (34) (98) - amortization of acquisition-related intangibles (25) (25) (25) (25) - restructuring charges 0 0 0 (4) OPERATING INCOME / (LOSS) as reported (121) (94) (59) (127) NET INCOME / (LOSS) NA NA NA NAFootnotes[1] The adjusted operating loss is defined as the operating loss reported beforeamortization of acquisition-related intangibles and restructuring charges and isused by management to help enhance the understanding of ongoing operations andto communicate the impact of the items on the operating loss as reported.[2] Net cash is defined as cash and cash equivalents, marketable securities,short term deposits less total debt[3] The unaudited pro-forma results are presented as if the ST-Ericsson jointventure had been created on January 1, 2008 and incorporates the results ofST-Ericsson and predecessors (ST-NXP Wireless and Ericsson Mobile Platforms)beginning on that date (while effectively it started operations on February2nd, 2009). Such results are presented for information purposes only and are notindicative of the results of operations that would have been achieved had theacquisition taken place as of January 1, 2008.Notes to editorsST-Ericsson invites analysts and investors to a conference call scheduled onJanuary 22 at 1:00 p.m. CET/7 a.m. US Eastern Time. Call-in numbers, a livewebcast of the conference call as well as supporting slides will be availableathttp://www.stericsson.com/investors/investors.jsp.About ST-EricssonST-Ericsson is a world leader in developing and delivering a complete portfolioof innovative mobile platforms and cutting-edge wireless semiconductor solutionsacross the broad spectrum of mobile technologies. The company is a leadingsupplier to the top handset manufacturers and ST-Ericsson's products andtechnologies enable more than half of all phones in use today. The companygenerated pro-forma sales of about $2.7 billion in 2009. ST-Ericsson wasestablished as a 50/50 joint venture by STMicroelectronics (NYSE:STM) andEricsson (NASDAQ:ERIC) in February 2009, with headquarters in Geneva,Switzerland. More information about ST-Ericsson is availableatwww.stericsson.com
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Datum: 22.01.2010 - 01:32 Uhr
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