ST-Ericsson reports wider loss on declining sales

ST-Ericsson reports wider loss on declining sales

SAN FRANCISCO—ST-Ericsson, the mobile phone chip joint venture between STMicroelectronics NV and Ericsson AB, reported a wider first quarter loss on declining sales Monday (April 23), due largely to lower sales to Nokia, one of its largest customers.

Earlier Monday, ST-Ericsson announced it would cut about 1,700 jobs to lower its breakeven point and transfer its standalone application processor activities to STMicroelectronics.

ST-Ericsson reported first quarter sales of $290 million, down 27 percent from the previous quarter and down 35 percent compared to the first quarter of 2011. The company reported a net loss of $312 million, 35 percent higher than the net loss of $231 million in the previous quarter and 75 percent higher than its net loss of $178 million in the first quarter of 2011.

Didier Lamouche, ST-Ericsson president and CEO, said in a statement that sales decreased substantially in the first quarter, as expected, due to a drop in sales of new products at Nokia, one of ST-Ericcson's largest customers, and the continued decline of ST-Ericsson's legacy products.

For the second quarter, ST-Ericsson said it expects net sales to increase sequentially in a low double-digit range.


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