STMicroelectronics (ST) announced that it has published its 2011 Half-Year Financial Report for the six-month period ended July 2, 2011 incorporating unaudited interim financial statements prepared in accordance with International Financial Reporting Standards (IFRS).
First half of 2011 net revenues increased by 5% to $5.10 billion from $4.86 billion in the year-ago period, driven by an increase of approximately 8% in volume offset by a decline in average selling prices by approximately 3%. Net revenues increased in all product segments compared to the year-ago period, except in Wireless, mainly reflecting a strong demand in Automotive and Imaging product lines within our Automotive, Consumer, Computer and Communication Infrastructure ("ACCI") product segment and of MEMS and Microcontrollers within the Analog, MEMS and Microcontrollers ("AMM") product segment. Net revenues also benefited from a longer first half in 2011 (183 days versus 177 days).
During the first half of 2011, gross margin reached 34.3% of revenues, decreasing by 30 basis points compared to the prior year period. The main factors contributing to the year-over-year deterioration during the first half of 2011 were a negative price impact and also the impact of amortization of development costs for key wireless products launched during the second half of 2010 and the first half of 2011 for which sales are still ramping up. These negative impacts were partially offset by improvements in the loading of the company’s fabs and by manufacturing efficiencies.
The overall year-over-year improvement of performance in the first half of 2011, in terms of higher revenues combined with the positive impact of improved manufacturing performances led to a solid improvement of operating income, moving from a profit of $107 million in the first half of 2010 to a profit of $294 million in the first half of 2011.
Net income in the first half of 2011 significantly increased to $444 million, benefiting from the cash payment from Credit Suisse as the full and final settlement of all outstanding litigation concerning Auction Rate Securities, which resulted in recording a $329 million benefit before taxes.
