ST Micro's revenue lags, targets $150 million savings

SAN FRANCISCO Tue Oct 23, 2012 7:53pm EDT

SAN FRANCISCO (Reuters) - STMicroelectronics NV (STM.PA) posted a third-quarter loss on revenue just under analysts' expectations, pressured by weakening global demand and persistent losses at its mobile chip venture with Ericsson (ERICb.ST).

Europe's top chipmaker predicted its fourth quarter revenue would range from a 5 percent decline to a 2 percent increase, underscoring its struggle to revive growth.

STMicro said on Tuesday it was streamlining manufacturing processes and taking other steps to try and save $150 million annually, adding it will present a "new" strategic plan in December to get the company back on track.

Earlier this month, STMicro and Ericsson said they had hired an adviser to review strategic options for their money-losing venture.

On Tuesday, ST Ericsson reported a third-quarter net loss of $190 million on sales of $359 million, and projected flat sales in the fourth quarter.

Analysts had expected the iPhone 5, which uses STMicro's "MEM" chips, to boost its third-quarter sales, but they were cautious on fourth-quarter demand given weak computer sales and macroeconomic uncertainty that could dent demand for the company's chips for cars.

STMicro reported an 11.3 percent year-over-year slide in third-quarter revenue to $2.17 billion, slightly below the $2.19 billion average forecast on Thomson Reuters I/B/E/S.

Among its markets, revenue from Asia was largely flat, but rose 5 percent in Europe, Middle East and Africa from the previous quarter.

(Editing by Richard Chang)