By Sam Schechner
STMicroelectronics NV narrowed its net loss in the fourth
quarter, but revenue at Europe's largest semiconductor maker
continued to fall.
STMicro, of Geneva, reported a net loss of $36 million, or four
cents a share, versus a year-earlier loss of $428 million, or 48
cents a share, largely due to smaller overall operating expenses
and reduced impairment and restructuring costs related to its
now-discontinued joint venture with Sweden's Ericsson.
Excluding those items, STMicro's adjusted loss was a penny a
share, an improvement from an adjusted per-share loss of 11 cents a
year earlier. Analysts had seen a roughly break-even performance,
after more than two years of quarterly losses.
Net revenue at the company, which makes microchips and sensors
for mobile devices and industrial applications devices, fell by
6.8% to $2.02 billion, in the middle of the company's guidance of
between $1.94 billion and $2.08 billion. Without ST-Ericsson,
however, revenue rose 3.9% from the prior year.
Gross margin grew to 32.9% from 32.3% a year earlier.
The Franco-Italian firm has been reeling from continued losses
since it unwound an unprofitable wireless chip joint venture with
Ericsson last year. Since then, the company has been pushing a
strategic shift away from wireless, to focus more on making
electronic sensors for cars and digital devices, as well as new
transistor-fabrication technologies it can license to others.
The transition has been difficult. STMicro had to take back a
large portion of its old joint venture's staff, along with those
costs.
For the current quarter, STMicro said it expects revenue to fall
9.5% on a sequential basis, give or take 3.5 percentage points, and
it projects gross margin of 32.4%, give or take two percentage
points.
"First quarter revenues reflect, on top of seasonality including
the New Year holiday in Asia, a drop in revenues from ST-Ericsson
legacy products of more than half from the fourth quarter of 2013
level," Chief Executive Carlo Bozotti said.
Michael Calia contributed to this article.
Write to Sam Schechner at sam.schechner@wsj.com
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