COMPANY PRESS RELEASE: STMicroelectronics has reported financial results for the fourth quarter and year ended December 31, 2001.
Net revenues for the fourth quarter were $1,447.9 million, a 3.4 % sequential increase over the $1,400.7 million reported in the 2001 third quarter. Sales of differentiated products totaled $1,012.1 million, a 3.9% increase over the previous quarter, and accounted for 69.9% of fourth quarter revenues. In last year’s fourth quarter, net revenues were $2,191.7 million, and differentiated product sales equaled $1,367.1 million.
The differentiated product sales increase was the major contributor to sequential fourth quarter revenue growth. Logic and memories were $203.1 million or 14% of net revenues, essentially flat with the prior period. Discretes grew 6.7% from the third quarter, to $151.8 million (10.5% of net revenues) and Standard and Commodities was $81.0 million (5.6% of net revenues), declining 1.1% from the third quarter.
With respect to applications, Computer registered the highest sequential revenue gain in the period, increasing 13.9% and accounting for 23.1% of fourth quarter net revenues. Consumer rose 1.9% from the third quarter and 19.6% of fourth quarter net revenues. Telecom was virtually flat on a sequential basis and comprised 34.2% of net revenues. Automotive was up 0.8% over the prior quarter and represented 11.1% of net sales. Industrial products, which include smart cards and distribution, accounted for 12.0% of net revenues rising 1.3% sequentially.
Pasquale Pistorio, President & Chief Executive Officer, commented: Fourth quarter performance was in line with the guidance we provided in our third quarter earnings release of October 18, 2001. The 3.4% sequential revenue increase posted in this difficult market environment reflected a more favorable product mix as well as the sales gains in computer peripherals and the continued growth of the wireless portion of our telecom business.
Gross profit edged down slightly on a sequential basis, but gross margin was penalized by low utilization rates, as a consequence of the Company’s accelerated inventory reduction program which succeeded in paring $134.5 million from 2001 third quarter inventory levels, Mr. Pistorio noted.
Selling, general, and administrative expenses were $140.3 million, 9.7% of net revenues, for the 2001 fourth quarter. This compares to $144.2 million in the third quarter and $193.1 million in the year ago quarter.
Research and Development expenses totaled $220.8 million or 15.2% of net revenues. This compares to $229.2 million in the 2001 third quarter and $286.4 million in the 2000 fourth quarter.
Operating income in the fourth quarter was $70.6 million, including the impact of $10.9 million in impairment and restructuring charges relating to the previously announced closings of the Company’s manufacturing facilities in Ottawa, Canada and Rancho Bernardo, California. On a comparable basis, 2001 third quarter operating income was $48.2 million, including $23.3 million of impairment and restructuring charges, and 2000 fourth quarter operating income was $563.2 million.
Net income for the 2001 fourth quarter was $45 million or $0.05 per diluted share, increasing from the $35.8 million, or $0.04 per diluted share reported in the third quarter of 2001. In last year’s fourth quarter, net income was $461.9 million, or $0.50 per diluted share. Pro forma net income for the 2001 fourth quarter was $55.2 million, or $0.06 per diluted share.
Summarizing ST’s 2001 fourth quarter results, Mr. Pistorio stated: Within a poor industry environment, characterized by significant overcapacity and pricing pressures, ST continued to outperform the industry in the markets it serves and to further strengthen its financial position.
Net revenues for the year ended December 31, 2001 were $6,356.9 million, an 18.6% decrease from $7,813.2 million in 2000. Gross profit was $2,380.6 million, or 37.4% of net revenues, down from the $3,596.3 million, or 46% of net revenues, reported in 2000. Operating income and net income, which include pro forma results for the 2001 second, third and fourth quarters, were $755.2 million and $600.8 million, respectively.
Selling, general and administrative expenses decreased 8.9% to $641.4 million in 2001, and increased to 10.1% of net revenues from 9.0% in 2000.
Research and development expenditures were $977.9 million for the year 2001 compared to $1,026.3 million in 2000. As a percentage of revenues, R&D expenditures increased to 15.4% from 13.1% in 2000.