The title of the Franco-Italian STMicroelectronics Semiconductor plunged nearly 9% Tuesday, July 26, in early trading on the Paris Stock Exchange and punished by investors after the announcement of quarterly results well below expectations.
The group had announced on the night, after the close of Wall Street, net income after minority interests of $ 420 million for the second quarter, up 18% year on year, but the figure was well below expectations. Excluding exceptional items and reported the number of shares, the profit is, in effect to 14 cents, while analysts had expected 22 cents. The revenues, meanwhile, rose 1.4% to $ 2.57 billion, meeting the expectations.
"As expected, during this quarter, we experienced winds related to the situation in Japan and the exchange rate, while continuing to deal with the ongoing transition from ST-Ericsson," said CEO Carlo Bozotti, said in a statement. "In addition, in June, we were faced with lower demand as well as much lower than expected outlook for products for wireless applications from a major customer, and we saw signs of weaker demand in some of our activities, such as digital consumer products and microcontrollers, "he added.
Gross margin for the quarter is also expected around 35.5%, down 38.6% compared to the first half - a result of the slowdown in production at some plants.
As for the quarter ended July 2, revenue rose 28% in the automotive sector, 17% in the segment "Other industrial" and 13% in IT. He, however, declined by 23% in the consumer segment and 20% in telecommunications. Distribution increased by 18%.
The group, which had started to lose its liquid assets with net cash of $ 1.07 billion, against $ 1.14 billion in the April 2, said he expected a sharp drop in capital spending in the second half, having almost completed the expansion of production capacity in the first half. He spent about $ 798 million of capital expenditure between January and early July.
