Sequential Improvement at STMicro

Moving ahead with its turnaround plan, STMicroelectronics ( STM) outpaced analysts' estimates with third-quarter earnings that tripled sequentially, but the company's fourth-quarter outlook didn't inspire late traders.

The Geneva, Switzerland-based company earned $89 million, or 10 cents a share, on revenue of $2.24 billion. Analysts polled by Thomson First Call were expecting 7-cent EPS on $2.23 billion in revenue. In the second quarter, STMicro earned $26 million, or 3 cents a share.

Demand for cell phones and computer peripheral applications were behind the European chipmaker's improved quarterly performance.

Gross margin for the quarter was 34.1%, in line with the company's previous guidance, and up from the second quarter's 33% margin.

Since surprising Wall Street with a $31 million loss in the first quarter of the year, the European chipmaker has taken steps to cut costs through layoffs and by revamping its product portfolio. The turnaround plan has been spearheaded by Carlo Bozotti, who took the helm as president and CEO in May.

"We are on track with our roadmap to improve overall corporate performance," Bozotti said in a statement. "Our efforts are starting to become visible with improvements in most of our key metrics to date. Nonetheless, there is more work to be done."

Looking ahead, STMicro said it anticipates fourth-quarter sales will increase 3% to 9%, which would put revenue between $2.30 billion and $2.44 billion. The $2.37 billion midpoint of this guidance is just below analysts' expectations of $2.38 billion.

As originally published, this story contained an error. Please see Corrections and Clarifications.

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