STMicro's fourth-quarter revenue stagnates
(Reuters) - STMicroelectronics NV (STM.PA) posted lower quarterly revenue and a narrow loss on Monday underscoring how the European chipmaker is losing ground to rivals as orders from its key customer Nokia (NOK1V.HE) shrink.
The company, whose chips are used in cars, computers and mobile phones, reported an operating loss of $11 million on fourth-quarter revenue of $2.01 billion. The revenue was lower than the $2.1 billion logged a year ago but largely unchanged from the previous quarter.
Analysts had forecast revenues of $2.03 billion on average, according to Thomson Reuters I/B/E/S.
The company had earlier predicted that fourth-quarter sales would be unchanged from the prior three months, plus or minus 3.5 percentage points.
After a loss-making third quarter, STMicro pushed back a key profit margin target by six months, blaming higher sales of chips for low-end mobile phones that are not as profitable as chips for high-end phones like Apple's iPhone or Samsung's Galaxy line.
Last year, STMicro and telecom network gear maker Ericsson ended their joint venture to make chips for mobile phones. Since then, STMicro has refocused on product lines for automobiles, video game consoles, and high-end smartphones, but that move has yet to pay off in terms of higher profits.
Franco-Italian STMicro is the eighth-largest semiconductor maker by global sales, but has lost ground to rivals like Qualcomm (QCOM.O), Intel (INTC.O) and Samsung (005930.KS) in recent years because of its higher cost base and the decline of Nokia.
Worldwide semiconductor revenue rose 5.2 percent last year to $315.4 billion from $299.9 billion in 2012, according to market research group Gartner. Intel kept the leading spot by sales, despite lower demand for computers that caused its chip sales to fall 2.2 percent, while Samsung and Qualcomm both notched up growth, according to Gartner.
STMicroelectronics shares climbed 8.8 percent last year, while Europe's Stoxx 600 technology index .SX8P rose 27 percent.
(This story fixes headline, 1st and 3rd paragraphs because firm did not miss target, and also correct analysts' average forecast to $2.03 billion, from $2.01 billion)