- Fourth quarter net revenues of $1.67 billion and gross margin of 33.5%
- 2015 net revenues of $6.90 billion and net income of $104 million
- Free cash flow* of $148 million in fourth quarter; $327 million in 2015
- ST to discontinue the development of new platforms and standard products for set-top-box and home gateway
GENEVA, Switzerland, Jan. 27, 2016 (GLOBE NEWSWIRE) -- STMicroelectronics (NYSE:STM), a global semiconductor leader serving customers across the spectrum of electronics applications, reported financial results for the fourth quarter and full year ended December 31, 2015.
Fourth quarter net revenues totaled $1.67 billion, gross margin was 33.5%, and net income was $2 million. For the full year 2015, net revenues totaled $6.90 billion, gross margin was 33.8%, and net income was $104 million.
"Fourth quarter sales and gross margin were well aligned with our guidance within a weak market, enabling ST to deliver a solid cash flow performance in the quarter and for the year in total," commented Carlo Bozotti, STMicroelectronics President and Chief Executive Officer.
"During 2015, we have increasingly focused our R&D and Sales & Marketing efforts on two areas: Smart Driving, enabled by digitalization and electrification, and the Internet of Things, including portable and wearable systems as well as smart home, city, and industry applications. Our products, technologies and system applications competencies are optimized for these areas, which we address with our products for Automotive and Industrial, our microcontrollers and digital ASICs, our analog and power portfolio as well as MEMS and specialized image sensors. The growth recorded in 2015 by our microcontrollers, and the solid performance of our automotive business despite weaker macroeconomic conditions, have been mainly driven by our sharpened, market-driven investment focus.
"Today we are announcing that we will discontinue the development of new platforms and standard products for set-top-box and home gateway. This difficult decision is consistent with our strategy to only participate in sustainable businesses and is due to the significant losses posted by our set-top box business over the past years in an increasingly challenging market."
----- (*)Free cash flow is a non-U.S. GAAP measure. Please refer to Attachment A for additional information explaining why the Company believes this measure is important and for reconciliation to U.S. GAAP.
Summary Financial Highlights
|U.S. GAAP (Million US$)||Q4 2015||Q3 2015||Q4 2014||FY 2015||FY 2014|
|Operating Income, as reported||25||91||38||109||168|
|Net Income attributable to parent company||2||90||43||104||128|
|Non-U.S. GAAP* Before impairment and restructuring charges (Million US$)||Q4 2015||Q3 2015||Q4 2014||FY 2015||FY 2014|
Review of ST's Set-Top box Business
ST's digital business is at the core of the company's strategy. It represents a significant share of ST's revenues and focuses on growing applications, with a portfolio that includes general purpose and secure microcontrollers, digital automotive products, ASICs and specialized imaging sensors.
After an extensive review of external and internal options for the future of the Company's set-top box business, ST will discontinue the development of new platforms and standard products for set-top-box and home gateway. The slower than expected market adoption of leading-edge products and increasing competition on low-end boxes, combined with the required high level of R&D investment, has led this business to generate significant losses in the course of the last years.
As a result of this, the Company announced a global workforce review, including:
- the redeployment of about 600 employees, currently associated with the set-top-box business, to support principally ST's growth ambitions in digital automotive and microcontrollers;
- a global workforce re-alignment that may affect approximately 1,400 employees worldwide, of which about 430 in France through a voluntary departure plan, about 670 in Asia and about 120 in the US. Deployment of the plan by country or site will be subject to applicable legislation and will depend on local negotiations. In 2016, the workforce re-alignment is anticipated to affect about 1,000 employees, out of which about 150 in France.
Annualized savings are estimated at $170 million upon completion and restructuring costs at about $170 million.
Fourth Quarter Review
Net revenues in the fourth quarter decreased 5.5% sequentially to $1.67 billion. By region of shipment, EMEA, Greater China & South Asia, Japan & Korea, and the Americas decreased by 2.8%, 5.2%, 7.6%, and 8.6%, respectively, on a sequential basis.