- Revenues of $1,993 million, up 20% sequentially - Inventory reduced by $207 million in second quarter, $391 million in first half - Net operating cash flow* turned positive to $45 million excluding M&A
"ST's second quarter results reflect solid progress across several key fronts," said President and CEO Carlo Bozotti. He then added:
-- "Revenue results of $1.99 billion for the second quarter came in above the high end of our internal planning target range of $1.73 to $1.93 billion, principally driven by stronger-than-expected performance across most market segments including Computer, Automotive, Telecom and Industrial and in China and Asia-Pacific. -- Bookings steadily increased through the second quarter despite a still uncertain environment. -- Our strong actions on fab loading to reduce inventory levels have led to a reduction in inventories of almost $400 million in just six months, accelerating inventory turns sequentially to 4.1 turns from 2.9 turns. As expected, these actions have driven our second quarter gross margin to an extraordinary low level.
"It is clear that the global recession has negatively impacted our financial results in the first half of 2009, but it has not slowed our efforts to develop leading-edge products. In the second quarter our pace of innovation continued as we brought to the market many next-generation products including analog controllers and power MOSFETs for power management in computer motherboards, high-voltage MDMesh power MOSFETs for switched-mode power supplies, MEMS gyroscopes, and advanced GPS solutions. Additionally, we ramped-up 55nm technology in ICs for set-top-boxes and, in wireless, we shipped in volume TD-SCDMA devices."
(*) Net operating 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.
Second Quarter Review
ST's net revenues for the second quarter of 2009 total $1,993 million and include the complete integration of the former Ericsson Mobile Platforms business into ST-Ericsson and $18 million from the licensing of technology. Net revenues increased 20% sequentially reflecting an increase in demand across ST's served market segments, as well as in all regions, with particular strength in China and Asia Pacific. Net revenues declined in comparison to the year-ago quarter in all market segments except Telecom, and in all regions except Asia Pacific, due to business conditions.
Net Revenues By Market Segment / Channel (a) (In %) Q2 2009 Q1 2009 Q2 2008 ------------------------------------ ------- ------- ------- Market Segment / Channel: Automotive 12% 12% 16% -- -- -- Computer 13% 11% 12% -- -- -- Consumer 11% 14% 14% -- -- -- Industrial & Other 8% 8% 10% - - -- Telecom 41% 43% 29% -- -- -- Total OEM 85% 88% 81% -- -- -- Distribution 15% 12% 19% -- -- -- (a) Sales recorded by ST-Ericsson and consolidated by ST are included in Telecom and Distribution.