downgraded STMicro to “underperform” from “neutral”. Analyst Jerome Ramel cited the “ugly” third-quarter guidance and the “collapse” in the gross margin. Banca Akros cut its recommendation on the shares to “reduce” from “hold,” citing an outlook “projecting revenues quite below expectations.”
ST-Ericsson said July 20 that its second-quarter net loss widened to $221 million from a year earlier as sales fell. ST-Ericsson, whose clients include Nokia and Samsung Electronics Co, expects net sales “to be about flat sequentially,” in the third quarter.
ST-Ericsson last month announced cost cuts aimed at saving $120 million a year and pushed back the date at which it expects to become profitable. The cuts will “affect up to 500 employees worldwide,” the company said.
STMicroelectronics said last night that second-quarter net income rose 18 per cent to $420 million on increased demand for chips used in cars and a settlement payment from Credit Suisse. Net revenue advanced 1.4 per cent to $2.57 billion.
STMicroelectronics said June 9 that it received $356.8 million from Credit Suisse as “full and final” payment to settle outstanding litigation concerning auction-rate securities. The chipmaker projected pretax profit of about $329 million in the second quarter as a result.
Chip sales for the industry will be between flat and 5 per cent higher this year, Bozotti said.