ST-Ericsson reports fourth quarter 2012 financial results

ST-Ericsson reports fourth quarter 2012 financial results 
GENEVA, SWITZERLAND -- (Marketwire) -- 01/30/13 --  
* Net sales $358 million, in line with outlook 
* Adjusted operating loss(1)) $133  million, 55% improvement since
Q1 2012 
* NovaThor(TM) shipments grew 45% sequentially 
Geneva, Switzerland,  January  30, 2013 -  ST-Ericsson,  a  joint 
venture of
STMicroelectronics  (NYSE: STM)  and  Ericsson  (NASDAQ:
ERIC), reported financial
results for the fourth fiscal quarter
ending December 31, 2012. 
Sales  in the fourth quarter were  approximately flat sequentially,
in line with
the  guidance provided,  reflecting growing 
contribution from NovaThor platform
shipments  as well  as $43 
million revenues  from IP  licensing. NovaThor ModAp
shipments grew
by 45% sequentially to 10.7 million units. 
Adjusted  operating loss decreased  to $133 million  as a further 
result of the execution  of the  strategic plan  announced in  April.
Since  the first quarter
2012 operating losses have been reduced by
55%, decreasing by $164 million. 
Didier  Lamouche, President and CEO, commented:  "The fourth quarter
was again a quarter  of solid  execution for  us with  revenues coming
 in as expected and a major  growth of the shipments  of our NovaThor
platform,  in part thanks to the new  Samsung  GALAXY  S  III  mini. 
We  have  continued to execute steadily and aggressively  on our 
strategy and  delivered on  our commitments to improve our financial 
results,  further  reducing  our  losses  and  controlling
expenses.
However,  we recognize  that the  level of  losses and  use
of cash remains very
high." 
Samples  of ST-Ericsson's first LTE ModAp  products became available
in December
and  the  first  NovaThor  L8580  ModAp  platform  based 
on STMicroelectronics'
advanced 28nm FD-SOI process was demonstrated
on January 7 at CES. 
"We  are also continuing to execute relentlessly against our
committed roadmap,"
continued  Lamouche. "We have reached key 
maturity milestones with our advanced
LTE  modem  which  is  in 
testing  with  customers  and  is  anticipated to be commercialized
as part of our NovaThor L8540 ModAp platform in 2013. As
promised
less  than a year ago  we also unveiled our  newest chipset
- the NovaThor L8580
ModAp  - which is the first 
product to  use
FD-SOI technology and is the world's
fastest  and  lowest  power 
integrated  LTE  modem  and  application processor
platform,
confirming the disruptive nature of FD-SOI technology." 


 
 
2012 fourth quarter financial summary (unaudited)
 $ million                                         Q4 2012 Q3 2012 Q4 2011
 
  Income Statement*
 
 NET SALES                                             358     359     409
 
 OPERATING INCOME/(LOSS) ADJUSTED(1)) for:           (133)   (148)   (207)
 
 - amortization of acquisition-related intangibles    (19)    (19)    (25)
 
 - restructuring charges                              (17)     (7)     (9)
 
 OPERATING INCOME / (LOSS) as reported               (169)   (174)   (241)
 
 NON-GAAP NET INCOME /(LOSS)                          71**   (190)   (231)
--------------------------------------------------------------------------
* Please refer to footnote n. 4 on page 6
** Includes $1531 million gain from shareholders' debt forgiveness and
   $1060 million charges for impairment of goodwill and intangible assets
 
$ million                                         Q4 2012 Q3 2012 Q4 2011
 
 Additional financial data
 Net Financial Position
 
 Cash, cash equivalents &
  short-term deposits/debt, net                         37      39       9
 
 Parent companies short-term debt                        0   (1390)   (807)
 
 Net financial position 2)                              37   (1351)   (798)
 
 Net operating cash flow  3)                          (152)   (146)   (204)
---------------------------------------------------------------------------

 
Additional financial information 
During the fourth quarter Ericsson and ST waived their credit of
$1546 million
under the parents' loan. 
Non-GAAP  net income in the fourth  quarter 2012 was $71 million,
including gain
from  the debt  forgiveness, impairment  of intangible 
assets and  write off of certain deferred tax assets. 
The net financial position(2) )at the end of the fourth quarter was
positive $37 million, reflecting the cancellation of the parents'
loan facility. 
Inventory  decreased by  $33 million  reaching $147  million at  the
end of the fourth quarter. Net operating cash flow decreased slightly,
reaching a negative $152 million. 
The fourth quarter 2012 closing is based on a going concern
assumption. In the
month of December 2012 ST-Ericsson shareholders
issued press releases about their future intent with respect to
ST-Ericsson. Following the uncertainty resulting from these
announcements we cannot exclude that the ST-Ericsson Financial
Statements could be further negatively affected by ST-Ericsson's
future scenario. 
Outlook 
For  the first quarter  2013, ST-Ericsson expects a  very significant
sequential
decline  in  net  sales,  mainly  resulting,  in  addition
 to the first quarter
seasonality,  from a combination  of no
revenues  from licensing expected in the quarter and further
weakening of legacy product sales. 


 
 
Highlights - Recent products, technology and wins
* Products
  * Samples of ST-Ericsson's first FD-SOI product became available in
    December and the NovaThor L8580 ModAp platform was announced on January
    7, 2013. The NovaThor L8580 ModAp is a multimode LTE-enabled integrated
    smartphone platform which features an eQuad-powered application
    processor running at up to 2.5Ghz and includes a full connectivity
    suite.
* Customers
  * Samsung GALAXY S III mini is powered by an ST-Ericsson NovaThor ModAp,
    making it the fourth Samsung smartphone using the NovaThor platform.
* Partners/technology
  * With the new NovaThor L8580 ModAp ST-Ericsson introduced eQuad
    technology. eQuad is a CPU architecture in which each processor core
    can operate as an industry-leading high performance core or a very
    low-power core for less computing-intensive tasks running at 0.6V.
    This is achieved by transistor-level electrical bias switching to allow
    each of two physical cores to run in two different modes, creating an
    electrically-enabled quad core. The eQuad processor delivers both the
    fastest processor speed at 2.5Ghz as well as by far the industry
    leading power efficiency with cores running at 1Ghz at only 0.65V.
  * ST-Ericsson tested and demonstrated its VoLTE (Voice over LTE)
    technology with key operators during the quarter. A white paper was
    published discussing VoLTE battery life and the benefits to be expected
    in upcoming modem generations such as ST-Ericsson solutions.
  * ST-Ericsson published a white paper on IMS Fusion. Through the
    invention of IMS Fusion, ST-Ericsson makes it possible for mobile
    devices to support an arbitrary number of downloaded or pre-installed
    IMS apps. This solves the problem of multiple IMS registrations without
    the need for a new modem API.
  * ST-Ericsson announced that it is ready to support Jolla's Sailfish OS
    in its NovaThor platforms.
 
Financial results appendix (unaudited)
 
Annual financial results
                                                    2012             2011
 $ million                                         ACTUAL           ACTUAL
 
 Income Statement *
 
 NET SALES                                           1351   
          1650
 
 OPERATING INCOME/(LOSS) ADJUSTED(1)) for:           (814)            (732)
 
 - amortization of acquisition-related intangibles    (75)            (101)
 
 - restructuring charges                              (89)             (34)
 
 OPERATING INCOME / (LOSS) as reported               (978)            (867)
 
 NON-GAAP NET INCOME / (LOSS)                        (749)**          (841)
 
--------------------------------------------------------------------------
2012  financial results by quarter
 $ million                                 Q4 2012 Q3 2012 Q2 2012 Q1 2012
 
 Income Statement *
 
 NET SALES                                     358     359     344     290
 
 OPERATING INCOME/(LOSS) ADJUSTED(1)) for:    (133)   (148)   (235)   (297)
 
 - amortization of acquisition-related
 intangibles                                   (19)    (19)    (19)    (19)
 
 - restructuring charges                       (17)     (7)    (56)    (10)
 
 OPERATING INCOME / (LOSS) as reported        (169)   (174)   (309)   (326)
 
 NON-GAAP NET INCOME / (LOSS)                  71**   (190)   (318)   (312)
---------------------------------------------------------------------------
* Please refer to footnote n. 4 on page 6
** Includes $1531 million gain from shareholders' debt forgiveness and
$1060 million charges for impairment of goodwill and intangible assets
 
Consolidated balance sheet *
 In $ million                        December 31, 2012 December 31, 2011
 
 ASSETS
 
   Current assets:
 
   Cash and cash equivalents                        37                9
 
   Trade accounts receivable, net                   35               97
 
   Inventories, net                                147              223
 
   Deferred tax assets                               1                8
 
   Other receivables and assets                     90              102
                                                  ---------------------
   Total current assets                            309              439
 
   Goodwill                                          0              745
 
   Other intangible assets, net                     12              437
 
   Property, plant and equipment, net              286              364
 
   Long-term deferred tax assets                     8              188
 
   Other investments and other non-current assets   44               70
                                                  ---------------------
                                                   349            1,804
 
   Total assets                                    659            2,243
                                                  ---------------------
 
 LIABILITIES AND SHAREHOLDERS' EQUITY
 
    Current liabilities:
 
  Short-term borrowings and current
  portion of long-term debt                          0              807
 
  Trade accounts payable                           155              175
 
  Other payables and accrued
  liabilities                                      253              292
 
  Deferred tax liabilities                           0                0
 
  Accrued income tax                                 6                8
                                                  ---------------------
  Total current liabilities                        414            1,282
 
    Reserve for pension and
 termination indemnities                            85               87
 
    Long-term deferred tax
 liabilities                                         0                3
 
    Other non-current liabilities                   29               25
                                                  ---------------------
                                                   114              115
 
    Total liabilities                              528            1,397
 
    Total equity                                   131              846
                                                  ---------------------
    Total equity and liabilities                   659            2,243
                                                  ---------------------
 
  ------------------------------------------------
* Please refer to footnote n. 4 on page 6

 
Footnotes 
1) The   adjusted   operating   income/(loss)   is   defined  as  the
operating
income/(loss)  reported before  amortization of 
acquisition-related intangibles
and  restructuring  charges  and  is 
used  by  management  to  help enhance the understanding  of ongoing
operations and to  communicate the impact of the items
on the
operating loss as reported. 
2) Net financial position represents the balance between financial
assets, which
comprise  cash,  cash  equivalents  and  short-term
deposits, and financial debt
which  includes bank  overdrafts and 
parent companies  short-term bridge credit
facilities. 
3) Net  operating cash  flow is  defined as  net cash from operating
activities,
less capital expenditure and less restructuring charges. 
4) The  fourth quarter 2012 closing is based  on a going concern
assumption. The valuation  of  several  items  in  the  financial 
report is based upon our best
estimate  using preliminary 
information available  to us  and under  this going
concern 
assumption.  In  the  month  of December 2012 ST-Ericsson'
shareholders
issued  press releases about their future intent with
respect to ST- Ericsson, on December 10(th) by STMicroelectronics and
on December 20(th) by Ericsson. 
Following  the  uncertainty  resulting  from  these  announcements,
the carrying
amounts  of goodwill and intangible assets  have been
substantially impaired. We cannot  exclude  that  the  ST-Ericsson 
Financial  Statements  could be further
negatively affected by
ST-Ericsson's future scenario. 
Notes to editors 
ST-Ericsson invites journalists, analysts and investors to a
conference call
scheduled on January 31 at 5 p.m. CET. Call-in
numbers, a live webcast of the
conference call, as well as supporting
slides, will be available at
www.stericsson.com/investors/investors.jsp. 
About ST-Ericsson 
ST-Ericsson  is a world leader in developing and delivering a
complete portfolio
of innovative mobile platforms and cutting-edge
wireless semiconductor solutions
across the broad spectrum of mobile
technologies. ST-Ericsson was established as a   50/50 joint  
venture   by   STMicroelectronics   (NYSE: STM)   and
Ericsson
(NASDAQ: ERIC) in February 2009, with headquarters in
Geneva,
Switzerland. 
www.stericsson.com 
www.twitter.com/STEricssonForum 
The ST-Ericsson results reported in this press release do not reflect
in their 
entirety the results of the Wireless Segment of
STMicroelectronics, which 
include other activities that are
not part of ST-Ericsson. 
### 
This press release contains forward-looking statements that involve
inherent
 risks and uncertainties. We have identified certain
important factors that may
cause actual results to differ materially
from those contained in such forward-       looking statements. For
a detailed description of risk factors see STMicroelectronics' (NYSE:
STM) and Ericsson's (NASDAQ: ERIC) filings with the US Securities and
Exchange Commission, particularly each company's latest published 
Annual Report on Form 20-F. 
Forward looking statements con
tained in this press release and the
fourth quarter 2012 closing are based on a going concern assumption.
In the month of
December 2012 ST-Ericsson' shareholders issued press
releases about their future
intent with respect to ST-Ericsson, on
December 10(th) by STMicroelectronics and on December 20(th) by
Ericsson. Please read this press release in conjunction with this
information. 
Fourth Quarter 2012 financial results:
http://hugin.info/1061/R/1674392/545192.pdf 
This announcement is distributed by Thomson Reuters on behalf of
Thomson Reuters clients. The owner of this announcement warrants
that: 
(i) the releases contained herein are protected by copyright and    
other applicable laws; and 
(ii) they are solely responsible for the content, accuracy and     
originality of the information contained therein. 
Source: Ericsson via Thomson Reuters ONE [HUG#1674392] 
FOR FURTHER INFORMATION, PLEASE CONTACT:
 Global Communications & Media
 Relations
 Claudia Levo, Geneva, Switzerland 
Investor & Analyst Relations
Fabrizio Rossini, Geneva, Switzerland
Phone: +41 22 929 6973
Email: investor.relations@stericsson.com 
Pamela McCracken, Santa Clara, U.S.A.
 Phone: +1 408 398 8565
 Email: media.relations@stericsson.com 
Ericsson Investor Relations
 Asa Konnbjer, Stockholm, Sweden
 Phone:   +46 10 713 3928
 E-mail:
 investor.relations@ericsson.com 
STMicroelectronics Investor Relations
Tait Sorensen, Phoenix AZ, US
Phone: +1 602 485 2064 
Celine Berthier, Geneva, Switzerland
Phone: +41 22 929 5812
Email: investors@st.com
 
 
Press spacebar to pause and continue. Press esc to stop.