STMicro Reports 2010 First Quarter Financial Results
STMicroelectronics (ST) reported financial results for the 2010 first quarter ended March 27, 2010. In a year-over-year comparison, net revenues increased 40.1% and were led by the Company’s IMS and ACCI product segments with 60% and 47% growth, respectively. All regions and market segments posted double-digit revenues growth. Delivering the strongest regional results were Greater China-South Asia and America with revenues rising 60% and 49%, respectively.
ST’s net revenues for the first quarter of 2010 totaled $2,325 million and included sales recorded by ST-Ericsson as consolidated by ST. Net revenues increased in comparison to the year-ago quarter in all market segments and in all regions. Net revenues decreased 10.0% sequentially, mainly reflecting fewer days in the fiscal first quarter compared to the prior quarter. ACCI and IMS product segments registered better than seasonal sequential revenues trends while the Company’s Wireless segment decreased by 17.6%.
On a year-over-year basis, all market segments posted double-digit growth, with Automotive increasing by 61%, Computer by 59%, Industrial by 37%, Consumer by 24% and Telecom by 13%. Distribution, which is essentially back to pre-recession levels, increased 114%, reflecting strong global demand and improving market conditions. Sequentially, all market segments decreased with Computer down 21%, Telecom by 14%, Automotive by 4% and Industrial and Consumer both by 1%. Distribution decreased sequentially by 9%.
Gross margin in the first quarter of 2010 was 37.7%, 70 basis points higher than the 37.0% reported in the fourth quarter of 2009, mainly due to increased fab loading and some minor benefit due to favorable currency. As anticipated, ST’s manufacturing performance continued to improve in the first quarter as the Company is currently operating near full capacity. Gross margin increased 1,140 basis points in comparison to the year-ago period level of 26.3% principally reflecting a return to normal fab loading as well as ongoing improvement from new products.
Combined SG&A and R&D expenses were $876 million in the first quarter of 2010, compared to $906 million in the prior quarter and $837 million in the year-ago quarter. Combined operating expenses, as a percentage of sales, were 37.7% vs. 35.1% in the prior quarter, and 50.5% in the year-ago quarter.
Related to the company’s cost-realignment initiatives, ST posted first quarter restructuring and impairment charges of $33 million, of which $25 million were related to ST-Ericsson. ST posted restructuring and impairment charges of $96 million and $56 million in the prior quarter and year-ago period, respectively.
President and CEO Carlo Bozotti commented, "Our first quarter revenues, well in-line with our expectations, reflected the significant rebound from the economic crisis and solid demand for our products. Although supply chain constraints somewhat limited our revenues opportunities, we fully participated in the market recovery with our new and innovative products."