ST posts 73% sequential income drop
By Colleen Taylor, Contributing Editor -- EDN, April 25, 2007
The year started off on a discouraging financial note for STMicroelectronics (ST). The Geneva, Switzerland-based semiconductor manufacturer Tuesday reported Q1 net income totaling $74 million, a 43.9 percent drop from its Q1 2006 net income of $132 million and a 73 percent* drop from its Q4 2006 net income of $276 million.
Even though ST said its net results included $12 million in various costs, its income drop is still staggering -- especially because the company's Q1 2006 results and its Q4 results also included similar costs of $13 million and $10 million, respectively.
Sales at ST fared better, but were still down. Q1 net revenues of $2.27 billion declined by 3.7 percent from Q1 2006's revenues and 8.4 percent from Q4 sales.
The company's Q1 gross profit was $785 million, down 6.2 percent year-over-year from the $837 million in gross profit it made in Q1 2006 and down 13.7 percent from its Q4 gross profit of $901 million. ST’s Q1 gross profit margin was 34.5 percent, compared to its Q1 2006 gross profit margin of 35.4 percent and its Q4 margin of 36.3 percent.
ST's management blamed its lackluster Q1 performance on a competitive price environment and the industry's currently easing inventory excesses. "Our first quarter sales and operating results were negatively impacted by declines in the wireless and consumer segments, in particular, as well as a tougher overall price environment and an unfavorable product mix within wireless," President and CEO Carlo Bozotti said in a statement. "As we manage through this period of correction, factory loadings have adversely affected gross margin."
*Editor's note: This story originally stated that ST's net income dropped 273 percent from Q4 2006, not 73 percent.
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The funny thing is they skip over the fact that most of their products are genuine crap AND their customer support is no better than a frogs turd. I have had to design around so many errata from ST that I now diligently make every effort to design them out of systems at any cost. If I never use another device from ST it will be too soon. I have even managed to get management to agree to fire anyone that deliberately designs in a part from ST.
Twice Burned Engineer - 2007-25-4 22:23:00 PDT -
Please explain how there can be such a thing as a 273% drop. A 100% drop goes from x to zero, any more requires the sequential value to be less than zero. It's insulting to see reporting of such low quality.
Rex Sandbach - 2007-25-4 12:18:00 PDT
