UPDATE 1-STMicro shares fall post results on JV fears

* Shares fall 2.9 percent

* Q2 net revenue $2.53 billion, vs $1.99 bln year earlier

* ST-Ericsson JV posts Q2 net loss of $139 million

(Adds management comments, background and market reaction)

PARIS, July 23 (Reuters) - Shares in chipmaker STMicroelectronics (STM.PA) fell on Friday as losses at its ST-Ericsson joint venture offset the second-quarter profit and stronger-than-expected sales forecast it published overnight.

The Franco-Italian company said sales of chips to automotive and industrial customers grew briskly during the second quarter while its wireless chip joint venture with Sweden's Ericsson (ERICb.ST) continued to lose money.

By 0909 GMT shares were down 2.9 percent, underperforming a 0.6 percent softer European technology sector index .SX8P.

Analysts voiced doubts about the struggling joint venture which makes wireless radio chips for mobile phones.

"The continuation of the recovery is confirmed by this publication, except for the ST-Ericsson joint venture, where the situation continues to worsen," said one trader.

One analyst wrote in a research note that earnings were better than expected but ST-Ericsson "continues to spoil things".

ST-Ericsson reported a second-quarter net loss of $139 million as sales fell roughly 18 percent to $544 million.

"ST-Ericsson is progressing on track with its restructuring plan. Major transition cannot be achieved overnight, and this is the case here ... we are committed to this wireless joint venture," Chief Executive Carlo Bozotti told a conference call on Friday.

ST-Ericsson, whose customers include Nokia (NOK1V.HE) and LG Electronics (066570.KS), is revamping its product portfolio partly to meet growing demand for smartphones.

STRONG ORDER INTAKE

STMicro said net revenue in the three months ending June 26 totaled $2.53 billion, compared with $1.99 billion in the year-earlier period and slightly below the $2.59 billion expected by analysts polled by Thomson Reuters I/B/E/S.

"What we see today is a strong flow of order income; there is no slowdown," CEO Bozotti told the conference call.

The chipmaker told an investor presentation last month it saw strong demand for the third quarter and a normal build-up of orders for the fourth quarter. [ID:nLDE6520WZ]

Yet like rivals it is wary of a reprise of a decade ago when the industry tacked on too much capacity too quickly and was then burned when demand waned.

STMicro's results come after rivals Intel (INTC.O) and Advanced Micro Devices Inc (AMD.N) reported forecast-beating results for the quarter, fueling optimism about the chip sector. [ID:nN12197658] [ID:nN15264825].

STMicro, the world's fifth-largest chipmaker, has focused on cutting costs and said its gross profit margin was 38.3 percent in the second quarter, up from 37.3 percent in the first.

STMicro reported second-quarter net income of $356 million that included a $264 million net gain primarily due to the sale of its stake in the Numonyx memory chip business. In the second quarter of 2009, STMicro had a net loss of $318 million. (Reporting by Leila Abboud and Simon Johnson; Additional reporting by Alexei Oreskovic and Marie Mawad; Editing by Bernard Orr and Michael Shields)