(STM) - Get Report

, the world's sixth-largest chipmaker, missed Wall Street's financial targets late Tuesday due to price pressure for its memory chips and a stronger-than-expected seasonal drop-off in demand.

The Geneva-based company announced new cost cuts and an intent to strengthen its product portfolio. STMicro's chips are used in a broad variety of products, including automobiles, computers, communications gear and consumer electronics products.

STMicro reported a net loss of $31 million, or 3 cents a share, on sales of $2.08 billion. During the same quarter last year, the company earned $77 million, or 8 cents a share, on sales of $2.03 billion.

Excluding charges, STMicro earned 4 cents a share. Analysts had expected earnings of 7 cents a share on sales of $2.15 billion, on average, according to Thomson First Call.

Gross margin was 32.9% in the first quarter compared with 36.6% in the fourth quarter and 35.4% in the first quarter last year. Currency impact knocked gross margin down by 1 percentage point.

At the quarter's start, STMicro predicted sales between $2.05 billion and $2.23 billion and gross margin of 34%, with currency impact representing 1.4 percentage points of the margin decline.

For the second quarter, STMicro predicted sales would be between $2.06 billion and $2.23 billion and a gross margin of 33.5%.

Analysts had expected sales of $2.23 billion and earnings of 12 cents a share.

"We are beginning to see signs of improvement in certain segments of the marketplace," said CEO Carlo Bozotti citing increased orders from distributors and wireless strength. "However, we still see strong price pressure in several markets, notably memory."

Shares of STMicro closed the regular session down 19 cents to $15.61.