STMicroelectronics Q2 Loss Widens

(RTTNews) - European semiconductor company STMicroelectronics NV (STM) on Monday reported a loss for the second quarter that widened from last year, reflecting lower revenues and a one-time charge on equity investments. Results for the quarter missed analysts' estimates.

The company's second-quarter net loss widened to $152 million or $0.17 per share from $75 million or $0.08 per share in the same period last year.

The latest quarter's results include a charge of $89 million on equity-method investments largely due to a one-time non-cash charge of $69 million on ST's equity value in 3Sun reflecting an impairment charges reported by the 3Sun joint venture.

3Sun is a joint initiative between Enel Green Power, Sharp and STMicroelectronics for the manufacture of thin film photovoltaic panels in Catania, Italy. Each partner owns a third of the common shares of the entity.

Adjusted loss for the quarter was $53 million or $0.06 per share, compared to adjusted loss of $47 million or $0.05 per share in the year-ago period. Two analysts polled by Thomson Reuters expected the company to report earnings of $0.02 per share for the quarter. Analysts' estimates typically exclude special items.

STMicroelectronics' net revenues for the quarter declined 5 percent to $2.05 billion from $2.15 billion in the same period last year. Analysts had a consensus revenue estimate for the quarter of $2.07 billion.

Revenues, excluding the soon-to-be-discontinued wireless product line, rose 4 percent from the previous-year quarter on better than normal seasonal demand.

Gross margin for the quarter declined to 32.8 percent from 34.3 percent in the same period last year. Total operating expenses declined to $779 million from $943 million in the year-ago period.

The company's Sense & Power and Automotive Products or SPA revenues rose 5 percent from last year, led by growth in MEMS. Meanwhile, Embedded Processing Solutions segment revenues declined 16 percent from last year, due to a significant decrease in ST-Ericsson sales and to a lesser extent, Digital Convergence or DCG.

The ST-Ericsson joint venture reported quarterly revenues of $176 million, down 31 percent on a sequential basis, due to the decline of legacy products.

In mid-March, STMicroelectronics and Ericsson (ERIC) decided to split up their unprofitable joint venture ST-Ericsson, a wireless platform and semiconductor supplier, and transfer its relevant parts to the parent companies. The formal transfer of the parts of ST-Ericsson to the parent companies is expected to be completed in early August 2013.

Looking ahead to the third quarter, STMicroelectronics forecasts revenues to be about flat on a sequential basis, plus or minus 3.5 percentage points. The company forecasts gross margin for the quarter of about 33.5 percent, plus or minus 2.0 percentage points. Analysts expect the company to report revenues of $2.12 billion.

STMicroelectronics forecasts net revenues, excluding the wireless product line, to increase about 3.5 percent at the midpoint of its guidance. Including Wireless product line, the company expects overall revenues to be about flat sequentially at the midpoint of its guidance.

The company said it continues to expect the ramp of key products in MEMS, Automotive, Microcontrollers and Imaging in the second half of the year, leading to higher sequential revenue results for both the third and fourth quarters of this year.

STM closed Monday's regular trading at 49.79, down $0.06 or 0.61 percent on a volume of 1.87 million shares.