- Third quarter net revenues of $1.80 billion, up 5.5%
sequentially and 1.9% year-over-year
- Q3 gross margin of 35.8%, up 190 basis points sequentially;
up 100 basis points year-over-year
- Free cash flow(1) before acquisition was $178 million
in Q3; $256 million year-to-date
STMicroelectronics (NYSE: STM), a global
semiconductor leader serving customers across the spectrum of
electronics applications, reported financial results for the third
quarter and nine months ended October 1, 2016.
Third quarter net revenues totaled $1.80 billion, gross margin
was 35.8%, and net earnings were $71 million or $0.08 per
share.
"In the third quarter revenues increased 5.5% sequentially
and 1.9% year-over year. Revenue growth also brought improved
operating profitability, with a third quarter operating margin
before impairment and restructuring of 6.6%," commented Carlo
Bozotti, STMicroelectronics President and Chief Executive
Officer.
"Sequential growth was driven by the increasing pervasiveness
of ST's products in flagship smartphones, wearables and Internet of
Things applications: from MEMS and sensors, including our latest
6-axis gyroscope, to imaging sensors, with new products based on
our Time-of-Flight technology, to our expanding STM32 family of
microcontrollers. In addition, we grew year-over-year in automotive
and we continued to see positive momentum in industrial, the
distribution channel and the mass market.
"In the quarter we completed the acquisition of NFC and RFID
reader assets, strengthening our portfolio of secure
microcontrollers for next-generation mobile and Internet of Things
devices, while also improving our cash balance thanks to increased
cash flow generated from operations."
U.S. GAAP (Million US$) |
Q3 2016 |
Q2 2016 |
Q3 2015 |
Net Revenues |
1,797 |
1,703 |
1,764 |
Gross Margin |
35.8% |
33.9% |
34.8% |
Operating Income (Loss) |
90 |
28 |
91 |
Net Income (Loss) attributable to parent company |
71 |
23 |
90 |
Net cash from operating activities |
330 |
191 |
225 |
Non-U.S. GAAP(1) (Million US$) |
Operating Income (Loss) before impairment and restructuring
charges |
119 |
40 |
102 |
Free cash flow |
100 |
47 |
85 |
Net financial position |
464 |
426 |
459 |
(1) Non-U.S. GAAP measure. See Appendix for reconciliation
to U.S. GAAP and additional information explaining why the Company
believes these measures are important.
Quarterly Financial Summary by Product Group
Product Group Data (Million US$) |
Q3 2016 Revenues |
Q2 2016 Revenues |
Q3 2015 Revenues |
Automotive and Discrete Group (ADG) |
704 |
721 |
706 |
Analog and MEMS Group (AMG) |
403 |
376 |
411 |
Microcontrollers and Digital ICs Group (MDG) |
587 |
556 |
590 |
Others (a) |
103 |
50 |
57 |
Total |
1,797 |
1,703 |
1,764 |
(a) Net revenues of "Others" includes revenues
from sales of Imaging Product Division, Subsystems, assembly
services, and other revenue.
Third Quarter Review
Third quarter net revenues increased 5.5% sequentially, at the
midpoint of the Company's guidance. Analog and MEMS Group (AMG)
revenues increased sequentially 7.1% driven by motion MEMS and
microphones. Microcontrollers and Digital ICs Group (MDG) increased
5.5% on a sequential basis driven by general purpose
microcontrollers and digital ASICs for networking. Automotive and
Discrete Group (ADG) revenues decreased 2.3% on a sequential basis
due to seasonality in automotive products and substantially flat
revenues in power discretes. Specialized image sensors, reported in
Others, registered a very strong sequential revenue growth due to
new products, based on ST's Time-of-Flight technology, ramping in
wireless applications.
On a year-over-year basis, third quarter net revenues increased
1.9%, or 3.4% excluding businesses undergoing a phase-out (mobile
legacy products, camera modules and set-top box). Growth was driven
by MEMS and sensors, microcontrollers, automotive, specialized
image sensors and digital ASICs partially offset by analog and
power discretes - both negatively impacted by the weak computer
peripheral market - and by the discontinued product lines.
By region, Asia Pacific grew revenues sequentially 12.7% while
the Americas and EMEA were lower by 0.1% and 5.4%, respectively. On
a year-over-year basis, Asia Pacific and EMEA grew revenues 5.6%
and 1.4%, respectively, while the Americas decreased by 10.2%.
Third quarter gross profit was $643 million. Gross margin was
35.8%, and included about 60 basis points of unused capacity
charges. On a sequential basis, gross margin increased 190 basis
points due to improved manufacturing efficiency and product mix,
partially offset principally by normal price pressure and higher
unused capacity charges. Gross margin also improved on a
year-over-year basis, increasing 100 basis points on improved
manufacturing efficiency and favorable currency effects, net of
hedging, partially offset by normal price pressure.
Combined R&D and SG&A expenses were $542 million,
decreasing by $23 million on a sequential basis, benefiting from
favorable seasonality and the set-top box restructuring plan.
Third quarter other income and expenses, net, registered income
of $18 million compared to $28 million in the prior quarter mainly
due to lower R&D funding.
Impairment and restructuring charges in the third quarter were
$29 million compared to $12 million in the prior quarter, both
mostly related to the set-top box restructuring plan announced in
January 2016.
Third quarter operating income was $90 million compared to $28
million and $91 million in the prior quarter and year-ago quarter.
In the third quarter, the Imaging Product Division turned to
profit. In addition, the Company continued to make progress on its
restructuring of the set-top box business targeting annualized
savings of $170 million upon completion. Operating income before
impairment and restructuring charges(1) improved sequentially to
$119 million, or 6.6% of revenues, from $40 million, mainly due to
higher revenues and higher gross profit as well as lower operating
expenses. On a year-over-year basis, operating income before
impairment and restructuring charges improved by $17 million
reflecting improved manufacturing efficiencies, better product mix,
lower operating expenses and favorable currency effects, net of
hedging, partially offset mainly by a lower level of R&D
grants.
Third quarter net income was $71 million, equivalent to $0.08
per share, compared to net income of $23 million in the prior
quarter and net income of $90 million in the year-ago quarter which
included an income tax benefit of $14 million related to the
settlement of a tax assessment.
Nine Month Financial Summary by Product Group
Product Group Data (Million US$) |
Nine Months 2016 Net Revenues |
Nine Months 2015 Net Revenues |
Automotive and Discrete Group (ADG) |
2,096 |
2,094 |
Analog and MEMS Group (AMG) |
1,148 |
1,301 |
Microcontrollers and Digital ICs Group (MDG) |
1,676 |
1,678 |
Others |
193 |
156 |
Total |
5,113 |
5,229 |
Nine Months 2016 Review
In total, net revenues in the nine months 2016 decreased 2.2% to
$5.11 billion from $5.23 billion in the year-ago period. Net
revenues, excluding businesses undergoing a phase-out, decreased
0.9% with strong growth in specialized image sensors and solid
growth in microcontrollers and automotive offset by analog and
power discrete, due to weakness in the computer peripheral markets,
and MEMS, due to weakness in smartphones earlier in the year.
Gross margin in the nine months 2016 improved to 34.4% from
33.9% in the year-ago period mainly benefiting from manufacturing
efficiencies and favorable currency effects, net of hedging,
partially offset by price pressure.
Nine Month 2016 operating income was $85 million compared to $84
million in the year-ago period. Operating income before impairment
and restructuring charges(1) was $154 million, compared to $145
million in the year-ago period reflecting improved manufacturing
efficiencies, better product mix, favorable currency effects, net
of hedging, and lower operating expenses partially offset mainly by
price pressure and lower R&D grants. ADG operating performance
improved principally due to mix improvements in comparison to the
year-ago period. MDG operating margin turned positive due to higher
sales of general purpose microcontrollers, lower sales of low
margin set-top box products and the savings from the set-top box
restructuring plan. AMG operating results decreased mainly due to
lower sales.
Combined R&D and SG&A expenses decreased 3.5% to $1.68
billion compared to $1.74 billion in the year-ago period mainly
reflecting lower R&D costs due to favorable currency effects,
net of hedging, and the benefits of the set-top box restructuring
plan and the saving plan completed in 2015.
Other income and expenses, net, registered income of $73 million
compared to $110 million in the year-ago period mainly due to a
lower level of R&D grants.
On a year-to-date basis, impairment and restructuring charges
were $69 million compared to $61 million in the year-ago period and
principally related to the set-top box restructuring plan.
Nine Month 2016 net income was $53 million, equivalent to $0.06
per share, compared to net income of $102 million, which included a
one-time $46 million income tax benefit, or $0.12 per share in the
year-ago period.
(1) Non-U.S. GAAP measure. See Appendix for additional
information and reconciliation to U.S. GAAP.
Cash Flow and Balance Sheet Highlights
Net cash from operating activities was $330 million and $662
million for the third quarter and nine months of 2016,
respectively. Nine months 2015 net cash from operating activities
was $597 million.
Capital expenditure payments, net of proceeds from sales, were
$143 million and $379 million during the third quarter and nine
months of 2016, respectively. Nine Month 2015 capital expenditures
were $378 million.
After the cash outflow of $78 million for the acquisition of NFC
and RFID reader assets, free cash flow(1) was $100 million and $178
million during the third quarter and nine months of 2016,
respectively. Nine months 2015 free cash flow was $179
million.
Inventory was $1.24 billion at quarter end, down 2.2% from the
prior quarter. Inventory in the third quarter of 2016 was at 3.7
turns or 97 days.
The Company paid cash dividends totaling $53 million and $197
million for the third quarter and year-to-date period,
respectively.
ST's total financial resources equaled $2.02 billion and total
financial debt was $1.55 billion at October 1, 2016. ST's net
financial position(1) was $464 million at October 1, 2016 compared
to $426 million at July 2, 2016.
Total equity, including non-controlling interest, was $4.65
billion at October 1, 2016.
(1) Non-U.S. GAAP measure. See Appendix for additional
information and reconciliation to U.S. GAAP.
Fourth Quarter 2016 Business Outlook
Mr. Bozotti commented, "Demand is currently strong in the
smartphone market and we continue to see positive trends in
automotive and industrial. In the fourth quarter, we anticipate at
the midpoint a sequential increase in net revenues of about 3.2%
and a gross margin of about 37.0%.
"Thanks to our strategic focus on Smart Driving and Internet
of Things, the increased traction we are seeing with our new
products and positive market trends, ST is positioned to achieve
year-over-year revenue growth for 2016 driven by automotive,
specialized image sensors and microcontrollers.
"In addition, we expect for 2016 to improve our profitability
and continue to generate solid free cash flow. While we remain
mindful of macroeconomic factors and their potential impact on our
customers and the semiconductor market, we see less macro risk than
we did earlier in the year."
The Company expects fourth quarter 2016 revenues to
increase about 3.2% on a sequential basis, plus or minus 3.5
percentage points. Gross margin in the fourth quarter is expected
to be about 37.0% plus or minus 2.0 percentage points.
This outlook is based on an assumed effective currency exchange
rate of approximately $1.11 = €1.00 for the 2016 fourth quarter and
includes the impact of existing hedging contracts. The fourth
quarter will close on December 31, 2016.
Recent Corporate Developments
- On July 29, ST announced that it had acquired ams' assets
related to its NFC and RFID- reader business. ST acquired
intellectual property, technologies, products and business highly
complementary to its secure microcontroller solutions serving
mobile devices, wearables, banking, identification, industrial,
automotive and IoT markets.
- On August 23, ST announced that it had posted its IFRS 2016
Semi Annual Accounts for the six-month period ended July 2, 2016,
on its website and filed them with the Netherlands Authority for
the Financial Markets.
Q3 2016 - Product and Technology Highlights
Automotive and Discrete Group (ADG)
- Launched strategic cooperation with European Tier1 for a new
generation of car-body applications using our 40nm 32-bit
microcontrollers;
- Captured a win for our 40nm powertrain microcontroller for an
automatic transmission from a major European Tier1;
- Continued expansion of market presence in infotainment for
Accordo STAR tuner families by earning an award for a high-volume
car radio with a major American OEM;
- Earned additional important wins for our audio amplifiers for
multiple telematics platforms for a European car manufacturer;
- Landed significant business wins for motor-control solutions
for fuel pumps from an important European Tier1;
- Registered multiple design wins for high-temperature triacs and
medium-power silicon-controller rectifiers from market leaders in
the appliance and automotive sectors;
- Collected design wins with SiC diodes in both automotive- and
server-market applications in China
- Released the first free-of-charge simulator to help designers
quickly validate electrostatic-discharge (ESD) protection and
signal integrity;
- Won important business for IGBTs from European appliance
leaders for a washing-machine platform, air-conditioning system,
and for induction heating;
- Recorded important wins with low-voltage trench-technology
products from a top European Tier1 and from a leading Asia-Pacific
Tier1;
- Earned an important win for an injection driver ASIC for engine
management from a market leading Tier1;
- Captured a major award for a motor pre-driver and power stage
for a parking brake from a Chinese manufacturer.
Analog and MEMS Group (AMG)
- Continued gaining traction for Bluetooth Low Energy ICs in
consumer applications and SPIRIT RF chips in industrial
applications.
- Earned multiple design wins in the mass market for our STSPIN
products, which were recognized as a Top 10 Power Product of the
Year in China by 21ic.com and EPC;
- Introduced an ultra-tiny, low-dropout regulator in a
breakthrough bumpless chip-scale package, which was named Product
of Month, by How2Power.com;
- Announced a high-voltage converter for ultra-low-consumption
power supplies in smart homes and industrial applications;
- Demonstrated progress in Industry 4.0 with an order from a top
industrial customer for IO-Link;
- Landed important wins for high-precision chopper amplifiers and
nano-power op-amps with multiple Tier1 automotive customers;
- Introduced high-efficiency wireless battery-charging chipsets
for smaller, simpler, sealed wearables;
- Named MEMS Manufacturer of the Year at the MEMS World Summit,
in Shanghai.
Microcontrollers and Digital ICs Group (MDG)
- Added new LoRa(TM) Kit to the STM32 Microcontroller
Development Ecosystem;
- Certified STM32 cryptographic library according to the US
Cryptographic Algorithm Validation Program;
- Designed the STM32L4 into gas meters at key European OEMs;
- Won socket for STM32F7 from a major Chinese OEM in a
smartwatch;
- Placed multiple STM32 series MCUs into motor controls for
industrial pumps at major European OEMs;
- Recognized with Smart Security Week Award for STSAFE-A100
Authentication Secure Element;
- Qualified ST33J2M0, 3rd-generation NFC Secure Element, in 40nm
technology;
- Captured a socket for a ST25 dynamic tag in a washing machine
from a major appliance OEM;
- Earned a win for 16k EEPROM in a camera module from a major
Japanese OEM;
- Signed a deal for an Internet-over-satellite application with a
major European satellite operator;
- Won a socket from a major OEM in the European Satellite
eco-system;
- Achieved a milestone 1 millionth ASIC shipment to a
networking-equipment market leader;
- Continued strong momentum of Optical ICs, exhibiting
double-digit sequential growth.
Use of Supplemental Non-U.S. GAAP Financial
Information
This press release contains supplemental non-U.S. GAAP financial
information, including operating income (loss) before impairment
and restructuring charges, operating margin before impairment and
restructuring charges, adjusted net earnings per share, free cash
flow and net financial position.
Readers are cautioned that these measures are unaudited and not
prepared in accordance with U.S. GAAP and should not be considered
as a substitute for U.S. GAAP financial measures. In addition, such
non-U.S. GAAP financial measures may not be comparable to similarly
titled information from other companies.
See the Appendix of this press release for a reconciliation of
the Company's non-U.S. GAAP financial measures to their
corresponding U.S. GAAP financial measures. To compensate for these
limitations, the supplemental non-U.S. GAAP financial information
should not be read in isolation, but only in conjunction with the
Company's consolidated financial statements prepared in accordance
with U.S. GAAP.
Forward-looking information
Some of the statements contained in this release that are not
historical facts are statements of future expectations and other
forward-looking statements (within the meaning of Section 27A of
the Securities Act of 1933 or Section 21E of the Securities
Exchange Act of 1934, each as amended) that are based on
management's current views and assumptions, and are conditioned
upon and also involve known and unknown risks and uncertainties
that could cause actual results, performance, or events to differ
materially from those anticipated by such statements, due to, among
other factors:
- Uncertain macro-economic and industry trends, which may impact
end-market demand for our products;
- Customer demand that differs from projections;
- The ability to design, manufacture and sell innovative products
in a rapidly changing technological environment;
- Unanticipated events or circumstances, which may impact our
ability to execute the planned reductions in our net operating
expenses and / or meet the objectives of our R&D Programs,
which benefit from public funding;
- Changes in economic, social, labor, political, or
infrastructure conditions in the locations where we, our customers,
or our suppliers operate, including as a result of macro-economic
or regional events, military conflicts, social unrest, labor
actions, or terrorist activities;
- The Brexit vote and the perceptions as to the impact of the
withdrawal of the U.K. may adversely affect business activity,
political stability and economic conditions in the U.K., the
Eurozone, the EU and elsewhere. While we do not have material
operations in the U.K. and have not experienced any material impact
from Brexit on our underlying business to date, we cannot predict
its future implications;
- Financial difficulties with any of our major distributors or
significant curtailment of purchases by key customers;
- The loading, product mix, and manufacturing performance of our
production facilities;
- The functionalities and performance of our IT systems, which
support our critical operational activities including
manufacturing, finance and sales, and any breaches of our IT
systems or those of our customers or suppliers;
- Variations in the foreign exchange markets and, more
particularly, the U.S. dollar exchange rate as compared to the Euro
and the other major currencies we use for our operations;
- The impact of intellectual property ("IP") claims by our
competitors or other third parties, and our ability to obtain
required licenses on reasonable terms and conditions;
- The ability to successfully restructure underperforming
business lines and associated restructuring charges and cost
savings that differ in amount or timing from our estimates;
- Changes in our overall tax position as a result of changes in
tax laws, the outcome of tax audits or changes in international tax
treaties which may impact our results of operations as well as our
ability to accurately estimate tax credits, benefits, deductions
and provisions and to realize deferred tax assets;
- The outcome of ongoing litigation as well as the impact of any
new litigation to which we may become a defendant;
- Product liability or warranty claims, claims based on epidemic
or delivery failure, or other claims relating to our
products, or recalls by our customers for products containing
our parts;
- Natural events such as severe weather, earthquakes, tsunamis,
volcano eruptions or other acts of nature, health risks and
epidemics in locations where we, our customers or our suppliers
operate;
- Availability and costs of raw materials, utilities, third-party
manufacturing services and technology, or other supplies required
by our operations.
Such forward-looking statements are subject to various risks and
uncertainties, which may cause actual results and performance of
our business to differ materially and adversely from the
forward-looking statements. Certain forward-looking statements can
be identified by the use of forward looking terminology, such as
"believes," "expects," "may," "are expected to," "should," "would
be," "seeks" or "anticipates" or similar expressions or the
negative thereof or other variations thereof or comparable
terminology, or by discussions of strategy, plans or
intentions.
Some of these risk factors are set forth and are discussed in
more detail in "Item 3. Key Information - Risk Factors" included in
our Annual Report on Form 20-F for the year ended December 31,
2015, as filed with the SEC on March 16, 2016. Should one or more
of these risks or uncertainties materialize, or should underlying
assumptions prove incorrect, actual results may vary materially
from those described in this release as anticipated, believed, or
expected. We do not intend, and do not assume any obligation, to
update any industry information or forward-looking statements set
forth in this release to reflect subsequent events or
circumstances.
STMicroelectronics Conference Call and Webcast
Information
On October 27, 2016, the management of STMicroelectronics will
conduct a conference call to discuss the Company's operating
performance for the third quarter of 2016.
The conference call will be held at 9:30 a.m. CET / 8:30 a.m.
BST / 3:30 a.m. U.S. Eastern Time (ET) / 12:30 a.m. U.S. Pacific
Time (PT). The conference call will be available live via the
Internet by accessing http://investors.st.com. Those accessing the
webcast should go to the Web site at least 15 minutes prior to the
call, in order to register, download and install any necessary
audio software. The webcast replay will be available until November
11, 2016.
About STMicroelectronics ST is a global semiconductor
leader delivering intelligent and energy-efficient products and
solutions that power the electronics at the heart of everyday life.
ST's products are found everywhere today, and together with our
customers, we are enabling smarter driving and smarter factories,
cities and homes, along with the next generation of mobile and
Internet of Things devices. By getting more from technology to get
more from life, ST stands for life.augmented.
In 2015, the Company's net revenues were $6.90 billion, serving
more than 100,000 customers worldwide. Further information can be
found at www.st.com
For further information, please contact: INVESTOR
RELATIONS: Tait
Sorensen
Group VP, Investor Relations STMicroelectronics Tel: +1 602 485
2064 tait.sorensen@st.com
MEDIA RELATIONS: Nelly
Dimey
Director, Corporate Media and Public Relations Tel: + 33 1
58 07 77 85 nelly.dimey@st.com
STMicroelectronics N.V. |
|
|
Consolidated Statements of Income |
|
|
(in millions of U.S. dollars, except per share data
($)) |
|
|
|
|
|
|
Three Months Ended |
|
(Unaudited) |
(Unaudited) |
|
October
01, |
September 26, |
|
2016 |
2015 |
|
|
|
Net
sales |
1,794 |
1,755 |
Other revenues |
3 |
9 |
NET REVENUES |
1,797 |
1,764 |
Cost
of sales |
(1,154) |
(1,151) |
GROSS PROFIT |
643 |
613 |
Selling, general and administrative |
(224) |
(218) |
Research and development |
(318) |
(331) |
Other income and expenses, net |
18 |
38 |
Impairment, restructuring charges and other related closure
costs |
(29) |
(11) |
Total Operating Expenses |
(553) |
(522) |
OPERATING INCOME |
90 |
91 |
Interest expense, net |
(5) |
(5) |
Income (loss) on equity-method investments |
(1) |
(1) |
INCOME BEFORE INCOME TAXES |
84 |
85 |
AND NONCONTROLLING INTEREST |
|
|
Income tax benefit (expense) |
(12) |
8 |
NET INCOME |
72 |
93 |
Net
loss (income) attributable to noncontrolling interest |
(1) |
(3) |
NET INCOME ATTRIBUTABLE TO PARENT COMPANY |
71 |
90 |
|
|
|
EARNINGS PER SHARE (BASIC) ATTRIBUTABLE TO PARENT COMPANY
STOCKHOLDERS |
0.08 |
0.10 |
EARNINGS PER SHARE (DILUTED) ATTRIBUTABLE TO PARENT
COMPANY STOCKHOLDERS |
0.08 |
0.10 |
|
|
|
NUMBER OF WEIGHTED AVERAGE |
|
|
SHARES USED IN CALCULATING |
|
|
DILUTED EARNINGS PER SHARE |
886.7 |
880.7 |
STMicroelectronics N.V. |
|
|
Consolidated Statements of Income |
|
|
(in millions of U.S. dollars, except per share data
($)) |
|
|
|
|
|
|
Nine Months Ended |
|
(Unaudited) |
(Unaudited) |
|
October
01, |
September 26, |
|
2016 |
2015 |
|
|
|
Net
sales |
5,097 |
5,202 |
Other revenues |
16 |
27 |
NET REVENUES |
5,113 |
5,229 |
Cost
of sales |
(3,355) |
(3,455) |
GROSS PROFIT |
1,758 |
1,774 |
Selling, general and administrative |
(681) |
(666) |
Research and development |
(996) |
(1,073) |
Other income and expenses, net |
73 |
110 |
Impairment, restructuring charges and other related closure
costs |
(69) |
(61) |
Total Operating Expenses |
(1,673) |
(1,690) |
OPERATING INCOME |
85 |
84 |
Interest expense, net |
(15) |
(16) |
Income (loss) on equity-method investments |
8 |
1 |
INCOME BEFORE INCOME TAXES |
78 |
69 |
AND NONCONTROLLING INTEREST |
|
|
Income tax benefit (expense) |
(21) |
38 |
NET INCOME |
57 |
107 |
Net
loss (income) attributable to noncontrolling interest |
(4) |
(5) |
NET INCOME ATTRIBUTABLE TO PARENT COMPANY |
53 |
102 |
|
|
|
EARNINGS PER SHARE (BASIC) ATTRIBUTABLE TO PARENT COMPANY
STOCKHOLDERS |
0.06 |
0.12 |
EARNINGS PER SHARE (DILUTED) ATTRIBUTABLE TO PARENT
COMPANY STOCKHOLDERS |
0.06 |
0.12 |
|
|
|
NUMBER OF WEIGHTED AVERAGE |
|
|
SHARES USED IN CALCULATING |
|
|
DILUTED EARNINGS PER SHARE |
885.4 |
880.0 |
STMicroelectronics N.V. |
|
|
|
CONSOLIDATED BALANCE SHEETS |
|
|
|
As at |
October
01, |
July
02, |
December 31, |
In millions of U.S. dollars |
2016 |
2016 |
2015 |
|
(Unaudited) |
(Unaudited) |
(Audited) |
ASSETS |
|
|
|
Current assets: |
|
|
|
Cash
and cash equivalents |
1,675 |
1,682 |
1,771 |
Restricted cash |
- |
- |
4 |
Marketable securities |
342 |
345 |
335 |
Trade accounts receivable, net |
1,009 |
886 |
820 |
Inventories |
1,238 |
1,266 |
1,251 |
Deferred tax assets |
83 |
78 |
91 |
Assets held for sale |
1 |
- |
1 |
Other current assets |
377 |
424 |
407 |
Total current assets |
4,725 |
4,681 |
4,680 |
Goodwill |
119 |
77 |
76 |
Other intangible assets, net |
199 |
153 |
166 |
Property, plant and equipment, net |
2,289 |
2,290 |
2,321 |
Non-current deferred tax assets |
465 |
465 |
436 |
Long-term investments |
57 |
57 |
57 |
Other non-current assets |
424 |
394 |
459 |
|
3,553 |
3,436 |
3,515 |
Total assets |
8,278 |
8,117 |
8,195 |
|
|
|
|
LIABILITIES AND EQUITY |
|
|
|
Current liabilities: |
|
|
|
Short-term debt |
117 |
171 |
191 |
Trade accounts payable |
674 |
597 |
525 |
Other payables and accrued liabilities |
728 |
654 |
703 |
Dividends payable to stockholders |
112 |
165 |
97 |
Deferred tax liabilities |
- |
1 |
2 |
Accrued income tax |
45 |
29 |
42 |
Total current liabilities |
1,676 |
1,617 |
1,560 |
Long-term debt |
1,436 |
1,430 |
1,421 |
Post-employment benefit obligations |
362 |
359 |
351 |
Long-term deferred tax liabilities |
8 |
13 |
12 |
Other long-term liabilities |
151 |
139 |
158 |
|
1,957 |
1,941 |
1,942 |
Total liabilities |
3,633 |
3,558 |
3,502 |
Commitment and contingencies |
|
|
|
Equity |
|
|
|
Parent company stockholders' equity |
|
|
|
Common stock (preferred stock: 540,000,000 shares authorized, not
issued; common stock: Euro 1.04 nominal value, 1,200,000,000 shares
authorized, 911,015,420 shares issued, 883,333,039 shares
outstanding) |
1,157 |
1,157 |
1,157 |
Capital surplus |
2,806 |
2,798 |
2,779 |
Retained earnings |
320 |
249 |
525 |
Accumulated other comprehensive income |
540 |
534 |
460 |
Treasury stock |
(243) |
(243) |
(289) |
Total parent company stockholders' equity |
4,580 |
4,495 |
4,632 |
Noncontrolling interest |
65 |
64 |
61 |
Total equity |
4,645 |
4,559 |
4,693 |
Total liabilities and equity |
8,278 |
8,117 |
8,195 |
STMicroelectronics N.V. |
|
|
|
|
|
|
|
SELECTED CASH FLOW DATA |
|
|
|
|
|
|
|
Cash Flow Data (in US$ millions) |
Q3 2016 |
Q2 2016 |
Q3 2015 |
|
|
|
|
Net Cash from operating activities |
330 |
191 |
225 |
Net Cash used in investing activities |
(230) |
(144) |
(120) |
Net Cash used in financing activities |
(107) |
(60) |
(121) |
Net Cash decrease |
(7) |
(15) |
(18) |
|
|
|
|
Selected Cash Flow Data (in US$ millions) |
Q3 2016 |
Q2 2016 |
Q3 2015 |
|
|
|
|
Depreciation & amortization |
172 |
179 |
186 |
Net payment for Capital expenditures |
(143) |
(136) |
(128) |
Dividends paid to stockholders |
(53) |
(57) |
(83) |
Change in inventories, net |
30 |
20 |
(14) |
Appendix STMicroelectronics
Supplemental Financial Information
In the first quarter of 2016, ST realigned its product families
into three product groups to better leverage the product synergies
around its strategic focus on Smart Driving and Internet of Things
applications: Automotive and Discrete Group (ADG); Analog and MEMS
Group (AMG) and Microcontrollers and Digital ICs Group (MDG). MDG
includes ST's set-top-box business which is currently undergoing a
restructuring targeting annualized savings of $170 million upon
completion. All prior-period amounts have been retrospectively
aligned to the 2016 reporting segments.
Product Group Data (Million US$) |
Q3 2016 |
Q2 2016 |
Q1 2016 |
9M 2016 |
Q3 2015 |
Q2 2015 |
Q1 2015 |
9M 2015 |
Automotive & Discrete (ADG) |
|
|
|
|
|
|
|
|
- Net Revenues |
704 |
721 |
671 |
2,096 |
706 |
714 |
674 |
2,094 |
- Operating Income (Loss) |
58 |
61 |
39 |
158 |
68 |
46 |
36 |
150 |
Analog & MEMS (AMG) |
|
|
|
|
|
|
|
|
- Net Revenues |
403 |
376 |
369 |
1,148 |
411 |
445 |
445 |
1301 |
- Operating Income (Loss) |
23 |
1 |
2 |
26 |
34 |
30 |
37 |
102 |
Microcontrollers & Digital ICs (MDG) |
|
|
|
|
|
|
|
|
- Net Revenues |
587 |
556 |
532 |
1,676 |
590 |
558 |
530 |
1,678 |
- Operating Income (Loss) |
44 |
9 |
(3) |
49 |
22 |
(1) |
(28) |
(8) |
Others (a) |
|
|
|
|
|
|
|
|
- Net Revenues |
103 |
50 |
41 |
193 |
57 |
43 |
56 |
156 |
- Operating Income (Loss) |
(35) |
(43) |
(71) |
(148) |
(33) |
(63) |
(64) |
(160) |
Total |
|
|
|
|
|
|
|
|
- Net Revenues |
1,797 |
1,703 |
1,613 |
5,113 |
1,764 |
1,760 |
1,705 |
5,229 |
- Operating Income (Loss) |
90 |
28 |
(33) |
85 |
91 |
12 |
(19) |
84 |
(a) Net revenues of "Others" includes revenues
from sales of Imaging Product Division, Subsystems, assembly
services, and other revenue. Operating income (loss) of "Others"
includes items such as unused capacity charges, impairment,
restructuring charges and other related closure costs, phase out
and start-up costs, and other unallocated expenses such as:
strategic or special research and development programs, certain
corporate-level operating expenses, patent claims and litigations,
and other costs that are not allocated to product groups, as well
as operating earnings of the Imaging Product Division, Subsystems
and other products. "Others" includes $11 million, $8 million, $10
million, $6 million, $9 million and $19 million of unused capacity
charges in the third, second and first quarters of 2016 and 2015,
respectively; and $29 million, $12 million, $28 million, $11
million, $21 million and $29 million of impairment, restructuring
charges, and other related closure costs in the third, second and
first quarters of 2016 and 2015, respectively.
|
Q3 2016 |
Q2 2016 |
Q1 2016 |
9M 2016 |
Q3 2015 |
Q2 2015 |
Q1 2015 |
9M 2015 |
€/$ Effective Rate |
1.12 |
1.12 |
1.10 |
1.12 |
1.16 |
1.17 |
1.23 |
1.19 |
Net Revenues By Market Channel(%) |
Q3 2016 |
Q2 2016 |
Q1 2016 |
9M 2016 |
Q3 2015 |
Q2 2015 |
Q1 2015 |
9M 2015 |
Total OEM |
67% |
66% |
67% |
67% |
67% |
67% |
70% |
68% |
Distribution |
33% |
34% |
33% |
33% |
33% |
33% |
30% |
32% |
(Appendix - continued)
STMicroelectronics Supplemental Non-U.S. GAAP Financial
Information U. S. GAAP - Non-U.S. GAAP Reconciliation
In Million US$ Except Per Share Data
The supplemental non-U.S. GAAP information presented in this
press release is unaudited and subject to inherent limitations.
Such non-U.S. GAAP information is not based on any comprehensive
set of accounting rules or principles and should not be considered
as a substitute for U.S. GAAP measurements. Also, our supplemental
non-U.S. GAAP financial information may not be comparable to
similarly titled non-U.S. GAAP measures used by other companies.
Further, specific limitations for individual non-U.S. GAAP
measures, and the reasons for presenting non-U.S. GAAP financial
information, are set forth in the paragraphs below. To compensate
for these limitations, the supplemental non-U.S. GAAP financial
information should not be read in isolation, but only in
conjunction with our consolidated financial statements prepared in
accordance with U.S. GAAP.
Operating income (loss) before impairment and restructuring
charges and one-time items is used by management to help enhance an
understanding of ongoing operations and to communicate the impact
of the excluded items, such as impairment, restructuring charges
and other related closure costs. Adjusted net earnings and earnings
per share (EPS) are used by management to help enhance an
understanding of ongoing operations and to communicate the impact
of the excluded items like impairment, restructuring charges and
other related closure costs attributable to ST and other one-time
items, net of the relevant tax impact.
The Company believes that these non-GAAP financial measures
provide useful information for investors and management because
they measure the Company's capacity to generate profits from its
business operations, excluding the effect of acquisitions and
expenses related to the rationalizing of its activities and sites
that it does not consider to be part of its on-going operating
results, thereby offering, when read in conjunction with the
Company's GAAP financials, (i) the ability to make more
meaningful period-to-period comparisons of the Company's on-going
operating results, (ii) the ability to better identify trends
in the Company's business and perform related trend analysis, and
(iii) an easier way to compare the Company's results of
operations against investor and analyst financial models and
valuations, which usually exclude these items.
Q3 2016 (US$ millions, except per share
data ($)) |
Gross Profit |
Operating Income (loss) |
Net Earnings |
Corresponding EPS |
U.S. GAAP |
643 |
90 |
71 |
0.08 |
Impairment & Restructuring |
|
29 |
29 |
|
Estimated Income Tax Effect |
|
|
(4) |
Non-U.S GAAP |
643 |
119 |
96 |
0.11 |
Q2 2016 (US$ millions, except per share
data ($)) |
Gross Profit |
Operating Income (loss) |
Net Earnings |
Corresponding EPS |
U.S. GAAP |
577 |
28 |
23 |
0.03 |
Impairment & Restructuring |
|
12 |
12 |
|
Estimated Income Tax Effect |
|
|
(2) |
Non-U.S GAAP |
577 |
40 |
33 |
0.04 |
Q3 2015 (US$ millions, except per share
data ($)) |
Gross Profit |
Operating Income (loss) |
Net Earnings |
Corresponding EPS |
U.S. GAAP |
613 |
91 |
90 |
0.10 |
Impairment & Restructuring |
|
11 |
11 |
|
Estimated Income Tax Effect |
|
|
- |
Non-U.S GAAP |
613 |
102 |
101 |
0.12 |
(continued) (Appendix - continued)
Net financial position: resources (debt),
represents the balance between our total financial resources and
our total financial debt. Our total financial resources include
cash and cash equivalents, marketable securities, short-term
deposits and restricted cash, and our total financial debt includes
short-term borrowings, current portion of long-term debt and
long-term debt, all as reported in our consolidated balance sheet.
We believe our net financial position provides useful information
for investors because it gives evidence of our global position
either in terms of net indebtedness or net cash position by
measuring our capital resources based on cash, cash equivalents and
marketable securities and the total level of our financial
indebtedness. Net financial position is not a U.S. GAAP
measure.
Net Financial Position (in US$ millions) |
October 1, 2016 |
July 2, 2016 |
September 26, 2015 |
Cash and cash equivalents |
1,675 |
1,682 |
1,869 |
Marketable securities |
342 |
345 |
338 |
Total financial resources |
2,017 |
2,027 |
2,207 |
Short-term debt |
(117) |
(171) |
(191) |
Long-term debt |
(1,436) |
(1,430) |
(1,557) |
Total financial debt |
(1,553) |
(1,601) |
(1,748) |
Net financial position - Non-U.S. GAAP |
464 |
426 |
459 |
Free cash flow is defined as net cash from operating activities
minus net cash from (used in) investing activities, excluding
payment for purchases (proceeds from the sale of) marketable
securities and short-term deposits, restricted cash and net cash
variation for joint ventures deconsolidation. We believe free cash
flow provides useful information for investors and management
because it measures our capacity to generate cash from our
operating and investing activities to sustain our operating
activities. Free cash flow is not a U.S. GAAP measure and does not
represent total cash flow since it does not include the cash flows
generated by or used in financing activities. In addition, our
definition of free cash flow may differ from definitions used by
other companies.
Free cash flow (in US$ millions) |
Q3 2016 |
Q2 2016 |
Q1 2016 |
9M 2016 |
Q3 2015 |
Q2 2015 |
Q1 2015 |
9M 2015 |
Net cash from operating activities |
330 |
191 |
141 |
662 |
225 |
223 |
149 |
597 |
Net cash used in investing activities |
(230) |
(144) |
(110) |
(484) |
(120) |
(190) |
(108) |
(418) |
Payment for purchase and proceeds from sale of marketable
securities, investment in short-term deposits, restricted cash and
net cash variation for joint ventures deconsolidation |
- |
- |
- |
- |
(20) |
20 |
- |
- |
Free cash flow - Non-U.S. GAAP |
100 |
47 |
31 |
178 |
85 |
53 |
41 |
179 |
--end---
ST Q3 2016 earnings_27oct2016
http://hugin.info/152740/R/2051874/767802.pdf
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