Dati STM
STMicroelectronics Reports 2003 Third Quarter/Nine Month Results
10/22/2003 5:30:00 PM
* Third Quarter Net Revenues Reached $1.8 billion; Gross Margin was 35.1% *
Scope of Restructuring Plan is Defined; Related Pre-tax Charge of $193
million ($130 million After-tax) Incurred in Third Quarter * Solid
Sequential Growth Expected for 2003 Fourth Quarter

GENEVA, Oct 22, 2003 /PRNewswire-FirstCall via COMTEX/ -- STMicroelectronics
STMicroelectronics ( STM ) reported financial results for the third quarter
and first nine months ended September 27, 2003.

Third Quarter 2003 Financial Results

Net revenues for the third quarter were $1,803.9 million, a 6.0% sequential
increase over second quarter 2003 revenues of $1,702.2 million and 9.6%
above the $1,645.2 million of last year's third quarter. Revenues from
differentiated products were $1,237.8 million, accounting for 68.6% of net
revenues for the period. Analog ICs (including mixed signal ICs) represented
47.7% of 2003 third quarter net revenues.

Gross profit was $632.5 million, a 4.1% sequential increase from the prior
quarter's $607.3 million and 3.8% above the $609.1 million reported for the
2002 third quarter. Gross margin was 35.1%, compared to the 35.7% of the
2003 second quarter and 37.0% in the comparable year-ago period.

Pasquale Pistorio, President and Chief Executive Officer, commented, "We are
pleased that third quarter net revenues were above the high end of our
guidance, driven by double-digit sequential increases in Digital Consumer
applications and Flash Memory products. Gross margin, at 35.1%, was in line
with our expectations of 'approximately 35%,' reflecting the difficult
pricing environment and the lower utilization rate which characterized the
first half of the third quarter. Increased orders for shipment in the fourth
quarter kept inventory levels constant with those of the prior quarter,
while inventory turns increased as anticipated."

In the 2003 third quarter, research and development expenses increased
modestly to $302.8 million from the $297.9 million of the second quarter of
2003, but declined as a percentage of revenues to 16.8% from 17.5% in the
2003 second quarter. In the 2002 third quarter, R&D expenses were $258.0
million and represented 15.7% of net revenues.

Selling, general, and administrative expenses were $191.7 million for the
2003 third quarter, virtually flat with the $191.2 million of the prior
quarter, declining to 10.6% of net revenues from 11.2% in the 2003 second
quarter. In the similar period last year, SG&A expenses were $162.7 million,
or 9.9% of net revenues.

In the third quarter, the Company incurred a pre-tax charge of $192.9
million ($129.5 million after-tax) related to its previously-announced
restructuring plan. Approximately 78% of this amount represented non-cash
impairment charges primarily associated with 6" wafer production in certain
of ST's fabs in France, Italy, and the U.S.

Impairment, restructuring charges and other related closure costs resulted
in an operating loss of $64.3 million for the third quarter. Before
impairment, restructuring charges and other related closure costs, the
Company posted third quarter operating income of $128.6 million. In the
prior and year-ago quarters, operating income equaled $121.5 million and
$184.8 million, respectively.

The Company's net loss for the third quarter was $49.1 million, or a $0.06
loss per diluted share. Before impairment, restructuring charges and other
related closure costs, and a non-operating pre-tax charge of $21.6 million
related to Bond repurchases, third quarter net income was $101.4 million, or
$0.11 per diluted share, compared to net income of $79.5 million, or $0.09
per diluted share, in the prior quarter (or $85.7 million, or $0.10 per
diluted share, excluding non-operating charges related to Bond repurchases).
In last year's third quarter, net income was $131.2 million, or $0.15 per
diluted share.

Commenting on third quarter performance, Mr. Pistorio noted, "While pricing
pressure continued in the quarter, ST experienced solid sequential growth in
Differentiated products, with Digital Consumer, Telecom, Computer
Peripherals, and Industrial market segments all showing gains over the prior
quarter. Revenues from Wireless, primarily comprised of Differentiated and
Memory products, were approximately $430 million for the quarter. On the
cost side, R&D and SG&A in the aggregate represented 27.4% of net revenues
in the third quarter, compared to 28.7% in the prior quarter. Interest
expense, net declined $4.7 million on a sequential basis, primarily as a
consequence of our Bond repurchases."

Balance Sheet Highlights

At September 27, 2003, ST had cash and cash equivalents and marketable
securities of $2.73 billion and total debt of $3.14 billion. Shareholders'
equity was $7.46 billion. The net debt to shareholders' equity ratio was
0.05.

Net cash from operating activities in the third quarter was $365.9 million
and reached $1,141.9 million for the first nine months of 2003. Capital
expenditures were $261.2 million in the 2003 third quarter, compared to
$298.1 million in the second quarter of 2003, and $298.5 million in the
year-ago third quarter. For the first nine months 2003, capital expenditures
totaled $815.0 million.

Free cash flow was $100.4 million for the 2003 third quarter, and for the
first nine months, free cash flow, before acquisitions of $135.0 million,
was $289.8 million.

Mr. Pistorio said, "In the third quarter, ST took advantage of favorable
market conditions to reduce interest expense and extend the maturity of
certain long-term debt. The Company raised gross proceeds of $1.4 billion
through a Zero Coupon Convertible Bond Offering due 2013, with a negative
yield of 0.5%. A large portion of the proceeds was used to repurchase
additional existing Convertible Bonds due 2010 and yielding 3.75%. As a
result of these transactions, we expect to benefit from interest expense
savings of $15 million for full year 2003 and approximately $34 million in
2004.

"Maintaining liquidity remains a priority," Mr. Pistorio continued, "and we
believe our strong cash position and low debt-to-equity ratio provide us
with important financial flexibility."

Restructuring Plan

Developed to safeguard and increase cost competitiveness and enhance
capacity, ST's restructuring plan, which is implemented pursuant to local
and regional initiatives, calls for the migration of approximately 60% of
the Company's European and U.S. 6" wafer production either to finer geometry
8" wafer fabs or to ST's 6" wafer fab in Singapore. To effect this
restructuring, the Company has announced plans to discontinue production at
its 6" wafer fab in Rennes, France, in March 2004, to close as soon as
operationally feasible its 6" wafer pilot line in Castelletto, Italy, and to
downsize by approximately one-half its 6" wafer fab in Carrollton, Texas.
Furthermore, ST's 6" wafer fab production in Agrate, Italy and Rousset,
France will be gradually phased-out, in favor of 8" wafer ramp-ups at
existing facilities in these locations, which will be expanded or upgraded
to accommodate additional finer-geometry wafer capacity.

The restructuring plan and related manufacturing initiatives are expected to
be substantially completed over the next 18 months and result in a total
pre-tax charge of approximately $350 million ($240 million after-tax), of
which an estimated 50% will represent non-cash items. Of the total charge,
$193 million ($130 million after-tax) was incurred in the 2003 third
quarter. The approximately $157 million in pre-tax charges ($110 million
after-tax) that were not incurred in the 2003 third quarter will be taken,
as incurred, in conjunction with the plan's evolution.

ST estimates that annualized after-tax cost savings at the completion of the
plan will be approximately $120 million.

Additional Third Quarter 2003 Financial and Operating Data

The following tables and commentary provide a breakdown of revenues and
operating income by product group and segment revenues by product category,
targeted market, and geographical region.

All major product groups recorded sequential revenue growth. MPG and CMG
were the major growth contributors posting sequential revenue increases of
22.5% and 8.1%, respectively. TPA and DSG revenues were up 1.6% and 1.0%
respectively, over the prior quarter. Significant sequential operating
income growth was recorded by DSG & CMG , and MPG succeeded in narrowing its
operating loss.

With the exception of Standard and Commodities which accounted for only 4.7%
of third-quarter revenues, all product families had solid sequential revenue
increases over the prior quarter. Micro and Memories was up 21.4%;
Differentiated products up 5.0%; and Discretes was up 4.0%.

The following table estimates, within a variance of 5% - 10% in the absolute
dollar amount, the relative weighting of each of the Company's target market
segments in the third quarter of 2003.

ST's target market segments remained balanced in the third quarter. Consumer
posted over 11% sequential revenue growth; Telecom was up 7% approximately;
Computer was up about 5%; and Industrial and Other, which includes
Smartcards, was up about 5%. Automotive posted a modest, less than 1%,
sequential revenue decline.

Nine Month 2003 Results

Net revenues for the nine months ended September 27, 2003 were $5,124.5
million, up 13.1% from the $4,531.5 million reported in the 2002 nine-month
period. Gross profit was $1,806.1 million, or 35.2% of net revenues.
Operating income was $180.8 million. Excluding impairment, restructuring
charges and other related closure costs, operating income was $373.7
million.

Net income was $109.4 million, or $0.12 per diluted share. Before
impairment, restructuring charges and other related closure costs, and a
non- operating pre-tax charge of $36.4 million related to Bond repurchases,
net income was $274.2, or $0.29 per diluted share.

Research and development expenses were $883.6 million, or 17.2% of net
revenues compared to $739.9 million in the 2002 nine-months, or 16.3% of net
revenues. Selling, general, and administrative expenses were $557.1 million,
or 10.9% of net revenues compared to $464.1 million, or 10.2% of net
revenues in the 2002 period.

Outlook

Looking ahead, Mr. Pistorio commented, "Currently available industry data
indicates that ST's year-over-year growth rate of 13.1% for the first nine
months of 2003 was in-line with, or slightly above, that of the markets we
serve, showing that we are maintaining our leadership position in key
targeted applications. Year-to-date industry growth, however, has been
primarily driven by unit demand, rather than the pricing leverage needed to
raise profitability levels."

"ST's backlog and order rates for the 2003 fourth quarter show solid
sequential growth in end market demand," Mr. Pistorio said. "Thus, we
currently expect ST's fourth quarter revenues to increase by 6% to 12% on a
sequential basis, representing a 7% to 13% improvement over last year's
fourth quarter. On a constant currency basis, gross margin should be within
the previously-announced 36% to 37% range, after the effect of the recent
black-out in Italy, which penalizes our fourth quarter gross margin by about
50 basis points.

"On a longer term basis," Mr. Pistorio noted, "we believe that ST is very
well positioned to benefit from the industry's projected growth rate for
2004 which is expected to approximate 18%, and to be driven by further
increases in silicon pervasion, higher levels of corporate spending
worldwide and an improved balance in the industry between capacity and
demand. Building upon the Company's full year 2003 capital expenditures of
approximately $1.2 billion, ST's 2004 capex will increase by about 33% to an
estimated $1.6 billion, of which over 50% will be allocated to strategic R&D
programs and leading-edge technologies."

All statements included in this release and in the related conference call,
other than statements which constitute historical facts are forward looking
statements which are based on Management's current expectations, views,
beliefs and assumptions as of the date of this release.

Such statements, which inter alia describe the Company's business strategy,
relationships, outlook, plans, intentions or goals, are subject to various
risks and uncertainties, which may cause actual results and performance of
the Company's business to differ materially and adversely from the
forward-looking statements.

Factors which may cause actual results or performance to differ materially
from the expectations of the Company or its Management include:

A more detailed discussion of these factors and the other "Risk Factors",
which may from time to time materially and adversely affect the Company, is
contained in our Annual Report or Form 20-F of the year ended December 31,
2002, which was filed with the SEC on March 14, 2003.

Conference Call Information

The management of STMicroelectronics will conduct a conference call on
October 23, 2003 at 9 a.m. U.S. Eastern Time / 3 p.m. CET, to discuss third
quarter 2003 financial and operating performance.

The conference call will be available via the Internet by accessing the
following Web address: . Those accessing the webcast should go to the Web
site at least 15 minutes prior to the calls, in order to register, download
and install any necessary audio software. The webcast will be available
through October 31, 2003.

About STMicroelectronics

STMicroelectronics is a global leader in developing and delivering
semiconductor solutions across the spectrum of microelectronics
applications. An unrivalled combination of silicon and system expertise,
manufacturing strength, Intellectual Property (IP) portfolio and strategic
partners positions the Company at the forefront of System-on-Chip (SoC)
technology and its products play a key role in enabling today's convergence
markets. The Company's shares are traded on the New York Stock Exchange, on
Euronext Paris and on the Milan Stock Exchange. In 2002, the Company's net
revenues were $6.32 billion and net earnings were $429.4 million. Further
information on ST can be found at

L'EPS mi sembra in linea con le attese a 0,11$
Domani vedremo.
Sperem

"Alfonso Rubini" <nospam@libero.it> ha scritto nel messaggio
news:g%Dlb.60301$e6.2128671@twister2.libero.it...
> L'EPS mi sembra in linea con le attese a 0,11$
> Domani vedremo.
> Sperem

Tanto se devono salire diranno che "il mercato aveva già scontato i dati..."
altrimenti che "Il titolo è penalizzato dalla trimestrale..."
Rosso o nero?:-))