ST-Ericsson Reduces its Loss in Q3

­ST-Ericsson, the joint venture of STMicroelectronics and Ericsson has reported a 9% sequential increase in net sales to US$728 million, although this was a drop of 37% compared to the pro-forma year ago revenues.

President and CEO, Alain Dutheil, commented: "During the third quarter sales were up 9%. Our focus on tight cost control and on completing the integration has started to improve results, and the remaining restructuring plan continues to progress according to schedule.

Customers and partners are endorsing our integrated solutions portfolio. We are experiencing good momentum with key customers for our U8500, the industry's first open OS 3G/HSPA single chip smartphone platform. We have also reinforced strategic relationships with key players in the computing market, such as Dell and Hojy, centered around our modem portfolio.."

The $77 million operating loss, excluding amortization of acquisition-related intangibles and restructuring charges, compares to a $165 million operating loss in the second quarter 2009. The reduced loss reflects a tight control of product costs and operational expenses and it includes positive seasonal effects.

The positive trend on inventory management continued in the third quarter, due to increased efficiency in the supply chain as well as cost reductions. Inventory reached $277 million, with a sequential decline of $48 million.

The $250 million cost synergies program defined by ST-NXP Wireless was substantially completed at the end of the quarter while the $230 million restructuring plan, announced by ST-Ericsson on April 29, 2009 and currently in progress, had a limited benefit to the third quarter results.

"While visibility on the medium term business environment remains poor, seasonal market trends are likely to be confirmed in the fourth quarter, where we expect Asia will again be one of the main drivers," concluded Dutheil.

Posted to the site on 21st October 2009