ST-Ericsson Reports Financial Results(1) for Its First Two Months of Operation

GENEVA, Apr 29 (MARKET WIRE) --
ST-Ericsson, a joint venture of STMicroelectronics (NYSE: STM) and
Ericsson (NASDAQ: ERIC), reported financial results for its first two
months of operation from February 2nd 2009.

President and CEO Alain Dutheil commented: "Our sales development in the
quarter reflects the broad-based economic downturn that has led to weaker
consumer demand for handsets and put pressure on the overall wireless
semiconductor industry. Even in such a challenging climate, during the
first quarter of 2009 we confirmed our number two position in the market,
we renewed our focus on innovation and we strengthened our partnership
with key customers. We were the first to consolidate in our industry,
creating a new global leader in wireless platforms and semiconductors,
and we are currently executing on an alignment of our operations that
will allow us to shape the long term success of the company, while
creating a sustainable cost structure for the short and medium term. A
more efficient and integrated product strategy, based on the future
convergence of our 3G roadmap and on our continued commitment on 2G/EDGE
and connectivity, as well as a strong focus on next generation access
technologies, will help us achieve our short and long term objectives and
continue to offer our customers a complete and innovative portfolio of
solutions."

FINANCIAL HIGHLIGHTS

First Quarter 2009 actual (Feb 2 - March 28 2009)

+--------------------------------------------+
| $ millions | Feb - March 2009 |
|-------------------------+------------------|
| Income Statement | |
|-------------------------+------------------|
| NET SALES | 391 |
|-------------------------+------------------|
| OPERATING INCOME/(LOSS) | (98) [2] |
|-------------------------+------------------|
| NET INCOME/(LOSS) | (89) |
+--------------------------------------------+

Net sales in the two months of operations reflected the economic
downturn that led to weaker consumer demand especially in Europe, mainly
in the feature phones segment, reinforced by overall inventory reduction
in the handset supply chain. The operating loss of $98 million was a
consequence both of the level of sales and of price pressure on margins,
partially offset by already planned reductions in operating expenses
related to the cost synergies program previously announced by ST-NXP
Wireless in November 2008. Net cash [3] was $358 million at the end of
Q109.

Alignment of operations and resources

A restructuring plan is being launched for immediate execution and is due
to be completed by the second quarter of 2010. This plan is incremental
to the $250 million cost synergies program announced by ST-NXP Wireless
in November 2008. Annualized savings of the new restructuring plan are
expected to be approximately $230 million upon completion. Restructuring
costs are estimated in the range of $70 - 90 million, of which the
majority is expected to be recorded during the second quarter of 2009.

The main assumptions of the restructuring plan are: a re-alignment of
product roadmaps to create a more agile and cost efficient R&D
organization; and a reduction in workforce of 1,200 worldwide to reflect
further integration activities following the merger, lower sales volumes
and limited visibility on the timing of market recovery.

Market evolution

"In view of the continued uncertainty of the global economy and in
accordance with published industry forecasts, we see a continued
challenging 2009 for our industry" said Alain Dutheil. "However, we
believe that the destocking phase is substantially over, even if we have
yet to see signs of a broad-based pick-up of demand in our industry".

Q1 2009 Highlights - Products, Technology and Wins

In February 2009 the company announced its cooperation with Nokia to
provide a Next-Generation Smartphone Platform for Symbian Foundation,
with a reference platform based on ST-Ericsson's U8500 single chip. Also
in February the company announced its collaboration with ARM to
demonstrate the world's first Symmetric Multi Processing mobile platform
technology running on Symbian OS. In March, the company launched fully
integrated single-chip solutions for feature-rich, low-cost handsets.
ST-Ericsson's 4910 and 4908 EDGE platforms combine the industry's highest
level of integration and cost-efficiency, with both digital and analog
basebands, RF transceiver and power management unit (PMU) in a single
chip. A next-generation mobile audio digital-to-analog converter (DAC) for
the mobile music market was also launched. ST-Ericsson's STw5211 further
extends the company's wide portfolio of audio solutions with enhanced
performance.

PRO-FORMA INFORMATION[4]

+-----------------------------------------------------------------------+

| | Q1 09 | Q4 08 | Q3 08 | Q2 08 | Q1 08 |
| |Pro-forma|Pro-forma|Pro-forma|Pro-forma|Pro-forma|
|---------------------+---------+---------+---------+---------+---------|
| NET SALES | 562 | 746 | 1,003 | 966 | 862 |
|---------------------+---------+---------+---------+---------+---------|
| OPERATING INCOME/ | (179) | (127) | (59) | (94) | (121) |
| (LOSS) | | | | | |
+-----------------------------------------------------------------------+

About ST-Ericsson

ST-Ericsson is a world leader in developing and delivering a complete
portfolio of innovative mobile platforms and cutting-edge wireless
semiconductor solutions across the broad spectrum of mobile technologies.
The company is a leading supplier to the top handset manufacturers and
ST-Ericsson's products and technologies enable more than half of all
phones in use today. The global company of 8,000 people generated
pro-forma sales of about USD 3.6 billion in 2008. ST-Ericsson was
established as a 50/50 joint venture by STMicroelectronics (NYSE: STM)
and Ericsson (NASDAQ: ERIC) in February 2009, with headquarters in
Geneva, Switzerland. More information about ST-Ericsson is available at
www.stericsson.com.

This press release contains forward-looking statements that involve
inherent risks and uncertainties. We have identified certain important
factors that may cause actual results to differ materially from those
contained in such forward-looking statements. For a detailed description
of risk factors see STMicroelectronics' (NYSE: STM) and Ericsson's
(NASDAQ: ERIC) filings with the US Securities and Exchange Commission,
particularly each company's latest published Annual Report on Form 20-F.

(1) The reported financial results are based on US GAAP.
(2) Operating Loss reported after :

amortization of acquisition-related intangibles & $(11) million
software capitalization
restructuring charges $ 0 million
Total $(11) million

(3) Net cash is defined as cash and cash equivalents, marketable
securities, short term deposits less total debt.
(4) The unaudited pro-forma results are presented as if the
ST-Ericsson joint venture had been created on January 1, 2008 and
incorporates the results of ST-Ericsson and predecessors (ST-NXP
Wireless and Ericsson Mobile Platforms) beginning on that date (while
effectively it started operations on February 2nd, 2009). Such
results are presented for information purposes only and are not
indicative of the results of operations that would have been achieved
had the acquisition taken place as of January 1, 2008. Pro-forma
results do not include inventory step-up and write-off of IP R&D for
a total value of $166M in Q3 and $39M in Q4.

This announcement was originally distributed by Hugin. The issuer is
solely responsible for the content of this announcement.

Copyright
Copyright Hugin AS 2009. All rights reserved.

FOR FURTHER INFORMATION, PLEASE CONTACT:
Global Communications & Media
Relations
Claudia Levo, Switzerland,
Geneva
Phone: +41 22 930 2750
Email: Email Contact

Kristina Embring Klang,
Sweden, Lund
Phone : +46 10 7135058
Email:
Email Contact

Investor Relations
Fabrizio Rossini, Switzerland,Geneva
Phone: +41 22 929 6973
Email: Email Contact

Ericsson
Susanne Andersson , Sweden, Stockholm
Phone: +46 10 719 4631
Gary Pinkham, Sweden, Stockholm
Phone: +46 10 719 0858
Andreas Hedemyr, Sweden, Stockholm
Phone: +46 10 404 3748
E-mail: Email Contact

STMicroelectronics
Tait Sorensen, US, Phoenix AZ
Phone: +1 602-485-2064
Celine Berthier, Switzerland, Geneva
Phone: +41 22 929 5812
Email: Email Contact

Copyright 2009, Market Wire, All rights reserved.

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