STMicroelectronics Reports 2006 Fourth Quarter Financial Results
STMicroelectronics Inc. reported financial results for the fourth quarter and full year ended December 31, 2006. Net revenues for the fourth quarter were $2,483 million, representing an increase of 3.9% over the $2,389 million reported in last year’s fourth quarter. Year-over-year growth was driven by double-digit increases in the industrial and consumer market segments. Sequentially, net revenues decreased 1.2% from the $2,513 million reported in the prior quarter, largely reflecting lower wireless sales.
President and CEO Carlo Bozotti commented, "Looking at the fourth quarter and near-term environment, the current market correction underway in some of the key applications we serve is more pronounced than forecasted. Our wireless results, in particular, came in well below historical seasonal revenue patterns and were also negatively impacted by product mix shift towards the low end, which put additional pressure on our margins and operating performance in the quarter."
Net revenues for the year ended December 31, 2006 were $9,854 million, an increase of 11% over the $8,882 million recorded in 2005. Strong growth in revenues was driven by double-digit increases in wireless and industrial, with mid-single digit contributions from the automotive, consumer and computer segments.
Gross profit was $901 million for the 2006 fourth quarter up from the $872 million in last year’s fourth quarter and a slight decrease from $904 million in the prior quarter. The gross margin was 36.3% in the fourth quarter, showing some improvement from the 36.0% reported in the prior quarter, despite the negative impact of fab closures and sequentially lower revenue. In the more favorable currency environment for the year-ago quarter, the gross margin was 36.5%.
For the full year, gross profit increased 16% to $3,523 million, from $3,037 million in 2005. The gross margin improved by 160 basis points in 2006 to 35.8% from 34.2% in 2005.