ST-Ericsson reports first quarter 2010 financial results

STOCKHOLM, SWEDEN and GENEVA, SWITZERLAND, Apr 22
(MARKET WIRE) --

- Net sales $606 million: 8% year-over-year increase pro-forma; 18%
sequential decrease

- Adjusted operating loss[1] $114 million

- Restructuring plans on track

ST-Ericsson, a joint venture of
STMicroelectronics (NYSE: STM) and Ericsson (NASDAQ: ERIC), reported
financial results for the first fiscal quarter ending March 27, 2010.

President and CEO, Gilles Delfassy, commented: "Sales in the quarter
reflected the short-term impact of the ongoing portfolio transition, as
well as some seasonality and the lower number of days in the fiscal
period. Our restructuring plans are well on track.

We have already taken significant steps towards achieving our planned
transformation and our new portfolio has been well received by our
customers. Our recently launched low-cost, Android(TM)-ready platform,
the U6715, is already shipping to Acer; we have announced a number of
enhancements to our smartphone offering, the U8500, and in TD-SCDMA we
confirmed our leading position, having delivered more than 10 million
chipsets.

ST-Ericsson remains focused on its key priorities for 2010: achieving a
competitive cost structure, transitioning to the new portfolio and
pursuing profitable growth."

First quarter 2010 financial highlights (unaudited)

+------------------------------------------+-------+-------+---------+
| |Q1 2010|Q4 2009| Q1 2009 |
| | | | PRO- |
| $ million | | | FORMA[2]|
+--------------------------------------------------+-------+---------+
| Income Statement | | | |
+--------------------------------------------------+-------+---------+
| NET SALES | 606 | 740 | 562 |
+--------------------------------------------------+-------+---------+
| OPERATING INCOME/(LOSS) ADJUSTED[1] for: | (114)| (50)| (149)|
+--------------------------------------------------+-------+---------+
| - amortization of acquisition-related | | | |
| intangibles | (24)| (27)| (30)|
+--------------------------------------------------+-------+---------+
| - restructuring charges | (27)| (62)| 0 |
+--------------------------------------------------+-------+---------+
| OPERATING INCOME / (LOSS) as reported | (164)| (139)| (179)|
+--------------------------------------------------+-------+---------+
| NET INCOME / (LOSS) | (154)| (125)| NA |
+--------------------------------------------------+-------+---------+

Net sales decreased by 18 percent sequentially due to the impact of
the on- going portfolio transition, to seasonal effects as well as to the
lower number of days in the fiscal quarter. The good traction of EDGE
platforms and the continued momentum in TD-SCDMA volume shipments were
offset by a fast decline in certain legacy products.

The sequential change in operating loss mostly reflects lower sales, the
effect of the unfavorable product mix and the lower contribution from
European funding programs which positively impacted the previous quarter.

Inventory declined by $14 million, due to the continued control of the
supply chain, reaching a level of $230 million at the end of the quarter.

Net cash[3] was $120 million at the end of the first quarter 2010, with a
sequential decline of $109 million mainly due to the operating loss and to
cash outflows related to restructuring.

Update on restructuring plans

The restructuring plans, respectively, of $230 million announced on April
29, 2009 and of $115 million announced on December 3, 2009, are on track.
By the end of the quarter, approximately half of the total expected
savings for the $230 million plan were realized. The $115 million
restructuring plan is expected to contribute savings starting in the
second half of 2010.

The R&D efficiency program has been initiated, with focus on common tools,
IT infrastructure and processes, and the company also completed the
complex integration of the IT systems.

Outlook

The company expects sequential net sales approximately flat with respect
to the first quarter 2010, due to the continued ongoing short-term impact
of the portfolio transition. Given expected top line and based on the
progression of the restructuring plans, the company does not anticipate
improvements of operating result to occur until the second half of 2010.

Highlights - products, technology and wins

ST-Ericsson announced numerous enhancements to its advanced smartphone
offering, U8500:

it broke through smartphone performance barrier by reaching a dual-core
smartphone platform, with each core running at a clock speed of 1.2 GHz,
and it launched a family of single-chip 1080p high-definition multimedia
interface (HDMI) transmitters to enable streaming of high-definition
multimedia content from mobile devices to TVs.

Together with ARM, ST-Ericsson will enable support for Android(TM) on
next-generation multicore mobile platforms.

It has also launched a new low-cost, compact and very power-efficient
Android-ready platform, U6715, broadening the smartphone segment and
bringing these advanced and customizable handsets affordable for the
mass-market.

ST-Ericsson's TD-SCDMA technology was selected by HTC for its smartphones
in China. The companies are developing both advanced mobile handsets,
capable of providing users with the ultimate multimedia mobile
experience, and low- cost models. The company also announced it will
cooperate with China Mobile on TD-LTE development.

In March, Sagem Wireless selected ST-Ericsson as its platform provider for
future Sagem Wireless devices, supporting a major part of the range of
products in its portfolio.

Financial results appendix (unaudited)

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

| | | Q1 2009 |Q22009|Q32009|Q42009|
| |Q12009| PRO- | | | |
| $ million |ACTUAL|FORMA[2] | | | |
+----------------------------------+------+---------+------+------+------+
| Income Statement | | | | | |
+----------------------------------+------+---------+------+------+------+
| NET SALES | 391 | 562 | 666 | 728 | 740 |
+----------------------------------+------+---------+------+------+------+
| OPERATING INCOME/(LOSS) | | | | | |
| ADJUSTED[1] for: | (78)| (149)| (165)| (77)| (50)|
+----------------------------------+------+---------+------+------+------+
| - amortization of acquisition- | | | | | |
| related intangibles | (20)| (30)| (24)| (25)| (27)|
+----------------------------------+------+---------+------+------+------+
| - restructuring charges | 0 | 0 | (35)| (19)| (62)|
+----------------------------------+------+---------+------+------+------+
| OPERATING INCOME / (LOSS) as | | | | | |
| reported | (98)| (179)| (224)| (121)| (139)|
+----------------------------------+------+---------+------+------+------+
| NET INCOME / (LOSS) | (89)| NA | (213)| (112)| (125)|
+----------------------------------+------+---------+------+------+------+

Footnotes

[1] The adjusted operating loss is defined as the
operating loss reported before amortization of acquisition-related
intangibles and restructuring charges and is used by management to help
enhance the understanding of ongoing operations and to communicate the
impact of the items on the operating loss as reported.

[2] The unaudited pro-forma results are presented as if the ST-Ericsson
joint venture had been created on January 1, 2009 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, 2009.

[3] Net cash is defined as cash and cash equivalents, marketable
securities, short term deposits less total debt.

Notes to editors

ST-Ericsson invites analysts and investors to a conference call scheduled
on April 23 at 4:45 p.m. CET/10:45 a.m. US Eastern Time. Call-in numbers,
a live webcast of the conference call as well as supporting slides will be
available atwww.stericsson.com/investors/investors.jsp.

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 company generated pro-forma sales of about $2.7
billion in 2009. 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.

FOR FURTHER INFORMATION, PLEASE CONTACT:

Global Communications & Media
Investor & Analyst Relations Relations

Claudia Levo, Geneva, Switzerland Fabrizio Rossini, Geneva, Switzerland

Jana Mancova, Geneva, Switzerland

Phone: 22 930 2733 Phone: 22 929 6973

Email: media.relations@stericsson.com Email:
investor.relations@stericsson.com

Kristina Embring Klang, Lund, Sweden

Phone: 10 713 5058

Email: media.relations@stericsson.com

Ericsson Investor Relations
STMicroelectronics Investor Relations

Susanne Andersson, Stockholm, Sweden Tait Sorensen, Phoenix AZ, US

Phone: 10 719 4631 Phone: 602 485 2064

Andreas Hedemyr, Stockholm, Sweden Celine Berthier, Geneva, Switzerland

Phone: 10 714 3748 Phone: 22 929 5812

E-mail: Email: investors@st.com investor.relations@ericsson.com

The ST-Ericsson results reported in this press release do not reflect in
their entirety the results of the Wireless Segment of STMicroelectronics,
which include other activities that are not part of ST-Ericsson.

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.

First quarter 2010
financial results: http://hugin.info/1061/R/1407219/360549.pdf

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