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ST Micro Misses on Top

The chipmaker boots sales and profit but says fourth-quarter sales and 2006 spending will decrease.

ST Microelectronics

(STM) - Get STMicroelectronics NV ADR RegS Report

posted third-quarter profit and revenue that grew year over year, but sales numbers were not enough to beat the Street.

The company also expects sales to be slower sequentially.

For the quarter ended Sept. 30, the semiconductor company earned $207 million, or 22 cents a share, more than double the dime in profit of a year ago -- or $89 million -- and a penny better than analysts at Thomson First Call forecast.

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ST said late Tuesday that revenue for the third quarter was $2.51 billion, 11.8% above the $2.25 billion reported in last year's third quarter. That was still lower than consensus estimates of $2.55 billion in sales.

ST attributed the year-over-year growth to double-digit increases in the telecom, industrial and consumer market segments.

According to CEO Carlo Bozotti, "ST's year-to-date sales growth of 13.5%, compared to estimates of industry growth of about 8.5%, confirms the inflection point we achieved last year when we began to regain market share."

But the CEO added that "in addition, we anticipate that our 2006 capital spending will be $1.6 billion -- $200 million lower than we had originally planned."

For the fourth quarter, the company says it expects sequential sales growth to range between -1% and 5%. "Nonetheless, ST will have double-digit revenue growth for 2006," Bozotti said.

Shares of the company were off 23 cents or 1.4% to $16.55 after hours.