STMicroelectronics Inc. (Geneva, Switzerland) reported that based upon preliminary data, net revenues for its 2003 first quarter, ended March 29, 2003, are expected to be $1,618 million, just slightly below the low end of its guidance range of $1,620 million, and the gross margin should be around 35 percent, below the bottom of the previous guidance range of 36 percent.
The company believes that the absolute amount of its operating expenses will be approximately flat with 2002 fourth-quarter levels despite the impact of the strengthened rate of the Euro versus the US dollar. In addition, the company incurred in the first quarter of 2003 a non-operating, one-time charge of $8.4 million as a result of the March 6, 2003, repurchase of approximately $429 million of the company's zero-coupon convertible notes due 2010, but expects interest expense savings of approximately $6 million in the remainder of 2003 to reduce the negative impact to about $3 million for the full year. The bond repurchase is expected to reduce ST's interest expense by approximately $10 million in 2004.
