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This call is being broadcast live over the web and can be accessed through ST's website. A replay will be available shortly after the conclusion of this call. This call will include forward-looking statements that involve risk factors that could cause ST's results to differ materially from management's expectations and plans.We encourage you to review the Safe Harbor statement contained in the press release that was issued with the results last night and also in ST's most recent regulatory filings for a full description of these risk factors. As a reminder, please limit yourself to one question and a brief follow-up. And now, I'd like to turn the call over to Carlo Bozotti, ST’s President and CEO. Carlo? Carlo Bozotti Thank you, Tait, and thank you for joining us for the -- for our second quarter conference call. Let me share some key points before going into a review of the quarter. First, net revenues and gross margin were in line with our guidance, and we saw a significant improvement in our net results. However, in June, we did see a negative impact on our second quarter earnings as a result of the macro-driven changes in the market environment. Second, we had an active quarter with respect to our product portfolio as we will hear from the level of new design wins and product ramps. Third, we have set three key priorities with which we will manage the business during the second half of 2012 and beyond. Priority number one is to gain market share and we want it to be profitable market share gains. As part of this we want to continue to expand our customer base, which will allow -- which will also help reduce the risks in our business. Priority number two, we are focused on moving our VLSI businesses, meaning our digital assets at ST, including ST-Ericsson, towards self-sustainability to drive improved financial performance.
And priority number three, we are focused on carefully managing our assets and investments, and we can see this evidenced in our revised CapEx spending and in our net financial position remaining strong.All these actions will enable us to improve our profitability and to enhance our flexibility to adjust to market changes. Turning now to the second quarter in detail. Revenues were up sequentially 6.5% to $2.15 billion and gross margin improved 470 basis points to 34.3%. We had expected the growth to be broad-based and it was, with all product segments reporting sequential growth even with the macro-driven change in customer demand in June. Revenues from our wholly-owned businesses increased 4.4% on a sequential basis, with APG and AMM somewhat below our expectations while Digital and Power Discrete came in at or above our expectations. AMM’s second quarter net revenues increased 2.2% led by our analog and microcontroller applications. Our automotive business grew sequentially 3.4%, driven by market share gains and growth in China, Japan and U.S. Digital revenues increased about 5% sequentially, thanks to our set-top box products and despite a decrease in Imaging, due to the situation at specific customers, which has also significantly impacted the profitability of the Digital segment. Power Discrete saw 12.3% sequential growth in the quarter led by Power MOSFETs. ST-Ericsson had been expecting low double-digit sales growth and came in higher at 19% as the NovaThor U8500 ModAp systems started to successfully ramp at major customers including Samsung and Sony Mobile Communications. As I outlined at the start of the call, a key priority for the second half of the year is gaining market share, profitable market share growth. We had a number of new design wins in the quarter, healthcare and wellness, power management and energy savings, trust and security for instance. And we have a number of new product ramps during the second quarter. Read the rest of this transcript for free on seekingalpha.com