STMicroelectronics Misses

STMicroelectonics NV (STM - Analyst Report) reported third quarter 2009 net loss of $201 million, or 23 cents per share, compared to a net loss of $318 million and $289 million in the prior quarter and year-ago periods, respectively. This was lower than the Zacks Consensus Estimate of a loss of 9 cents per share.

ST’s net revenues for the third quarter of 2009 total $2,275 million and include sales recorded by ST-Ericsson as consolidated by ST. Net revenues increased 14% sequentially, reflecting an increase in demand across all of ST’s served market segments as well as in all regions, with particular strength in Asia Pacific and Greater China.

On a sequential basis, all market segments posted growth, with Computer increasing by 21%, Automotive by 18%, Telecom by 14%, Consumer by 11% and Industrial by 9%. Distribution increased 20%, reflecting the better alignment of the company’s inventory to current demand levels and improving market conditions.

Gross margin in the third quarter of 2009 was 31.3% -- significantly higher than the 26.1% reported in the second quarter of 2009, due to improved volumes and increased fab loading, as well as cost reduction measures.

In the third quarter, combined SG&A and R&D expenses were $885 million, compared to $896 million in the prior quarter and $899 million in the year-ago quarter, which did not include the activities related to Ericsson Mobile Platforms.

In the third quarter of 2009, ST’s loss on equity investments was $42 million including a charge of $33 million that represents ST’s proportional share of the loss reported by Numonyx in its second quarter of 2009.

Net operating cash flow, excluding M&A transactions, was $100 million for the third quarter of 2009 compared to $45 million in the prior quarter and $140 million in the year ago quarter.

Capital expenditures were $98 million during the third quarter of 2009, compared to $74 million in the prior quarter and $247 million in the year-ago quarter. Year-to-date, capital expenditures totaled $261 million, compared to $777 million for the 2008 respective period.

Going forward, the company expects a further significant sequential improvement in our gross margin to about 36.5%.

Total cash and equivalents were $1.5 billion with long-term debt at $2.4 billion and shareowner’s equity at $8.5 billion at the end of the quarter.

STMicroelectronics N.V., an independent semiconductor company, together with its subsidiaries, designs, develops, manufactures, and markets semiconductor products used in various microelectronic applications. The company was founded in 1987 and is headquartered in Geneva, Switzerland. Major competitor includes Texas Instruments Inc (TXN - Analyst Report).