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ST-Ericsson : ST-Ericsson reports fourth quarter 2012 financial results

   ST-Ericsson : ST-Ericsson reports fourth quarter 2012 financial results

  *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 position²^)                                   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

  oProducts

       oSamples 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. 

  oCustomers

       oSamsung GALAXY S III mini is powered by an ST-Ericsson NovaThor
         ModAp, making it the fourth Samsung smartphone using the NovaThor
         platform.

  oPartners/technology

       oWith 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. 
       oST-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.
         
       oST-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.
       oST-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 forimpairment 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

FOR FURTHER INFORMATION, PLEASE CONTACT:

Global Communications & Media         Investor & Analyst Relations
Relations                             Fabrizio Rossini, Geneva, Switzerland
Claudia Levo, 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           STMicroelectronics Investor Relations
Asa Konnbjer, Stockholm, Sweden       Tait Sorensen, Phoenix AZ, US
Phone:  +46 10 713 3928              Phone: +1602 485 2064
E-mail:
investor.relations@ericsson.com      Celine Berthier, Geneva, Switzerland
                                      Phone: +41 22929 5812
                                      Email: investors@st.com





                                     ###
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 contained 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^thby
STMicroelectronics and on December 20^th by Ericsson.
Please read this press release in conjunction with this information.







Fourth Quarter 2012 financial results

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Source: ST-Ericsson via Thomson Reuters ONE
HUG#1674376
 
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