* Loss per share, excluding items, 6 cents
* To cut 4,500 net jobs in 2009 to save over $700 million
* Expects Q1 revenue of $1.5 billion to $1.85 billion
(Adds details on forecasts, analysts and executives'
PARIS/LOS ANGELES, Jan 27 Franco-Italian chip
maker STMicroelectronics (STM.PA) plans to slash 4,500 jobs in
2009, joining rivals across the globe in fighting dwindling
tech spending as it unveiled disappointing quarterly losses and
Europe's largest chip company, whose top client Nokia
NOK1V.HE last week announced worse-than-expected earnings,
expects to post $1.5 billion to $1.85 billion revenue in the
first quarter -- a slide of up to 40 percent and short of
The company, which like rival Texas Instruments TXN.N
TXN.N is battling an industry downturn, is hoping to save
more than $700 million this year through a net reduction of
STMicro also announced it was slashing 2009 capital
expenditures by half to $500 million.
The results "reflected the accelerated level of order
push-outs and cancellations and decrease in demand as the
quarter progressed," Chief Executive Carlo Bozotti said in a
But he added: "We grew our revenues faster than the overall
market during 2008 and estimate we are approaching a record
level of market share."
The supplier of chips for products from MP3 players to
automated door openers reported a net loss of $366 million or
42 cents per share in the fourth quarter, versus a net income
of $20 million or 2 cents a share a year ago.
But excluding charges related to restructuring and
impairment, inventory step-up, and other-than-temporary
impairments on equity investment and certain financial assets,
it posted a loss of $57 million, or 6 cents per share, in the
fourth quarter versus a profit of $255 million, or 27 cents per
share, a year earlier.
Analysts, on average, had expected earnings of 4 cents per
share on a comparable basis, according to Reuters Estimates.
Revenue fell 17 percent to $2.28 billion and the company's
gross margin stood at 36.1 percent. STMicro had said it
expected fourth-quarter margins of about 38 percent.
For full details, please click
A TECH PLAGUE
ST Micro's shares did not trade actively after hours in New
York (STM.N) on Tuesday. They ended the day in Paris up nearly
For the first quarter of 2009, the group's revenue range of
$1.5 billion to $1.85 billion fell short of a consensus
estimate for $1.895.81 billion.
STMicro's lackluster showing reflected problems plaguing
the global chip industry.
Global cellphone shipments are poised to drop in 2009 after
years of inexorable growth, while the automotive industry --
once the major source of profitable growth for many chip makers
-- is scaling back production and firing thousands.
Texas Instruments on Monday posted a smaller-than-expected
drop in quarterly profit, but added that it may post a loss in
the first quarter of 2009. [ID:nN26383880]
Nokia, the world's No. 1 cellphone maker and STMicro's
largest single client, last week posted worse-than-expected
earnings and warned industry phone sales were set to drop 10
percent in 2009. [ID:nLL462427]
Telecommunications typically accounts for by far the
largest portion of STMicro's net revenue, at nearly 40 percent
in the fourth quarter.
On Nov. 28, STMicro had lowered its outlook for full-year
sales and earnings, blaming the global slowdown on demand for
its wireless, automotive and computer peripheral products.
It also lowered its target for a gross margin in the period
to 38 percent, plus or minus one percentage point, compared
with a previous target of around 38.8 percent, citing unused
plant capacity. [ID:nL0278631]
(Writing by Edwin Chan and Matt Gil; editing by Richard