STMicroelectronics Q4 Net Income Decreases; Announces Global Workforce Review

(RTTNews) - STMicroelectronics (STM) reported fourth-quarter net income to parent company of $2 million or breakeven per share compared to $43 million or $0.05 per share, last year. Fourth quarter gross margin was 33.5%, down by 30 basis points year-over-year, mainly due to price pressure and lower sales of licenses largely offset by favorable currency effects, net of hedging, manufacturing efficiencies and favorable product mix.

Net revenues decreased to $1.67 billion from $1.83 billion, a year ago. On a year-over-year basis, net revenues decreased 8.8% or 5.5% excluding negative currency effects and mobile legacy products.

"Fourth quarter sales and gross margin were well aligned with our guidance within a weak market, enabling ST to deliver a solid cash flow performance in the quarter and for the year in total," said Carlo Bozotti, STMicroelectronics President and CEO.

STMicroelectronics announced that it will discontinue the development of new platforms and standard products for set-top-box and home gateway. The company said its decision is consistent with strategy to only participate in sustainable businesses and is due to the significant losses posted by set-top box business over the past years in an increasingly challenging market.

The company announced a global workforce review, including: the redeployment of about 600 employees, currently associated with the set-top-box business; and a global workforce re-alignment that may affect approximately 1,400 employees worldwide, of which about 430 in France through a voluntary departure plan, about 670 in Asia and about 120 in the US.

The company expects first quarter 2016 revenues to decrease about 3% on a sequential basis, plus or minus 3.5 percentage points. Gross margin in the first quarter is expected to be about 33.0% plus or minus 2.0 percentage points.