STMicroelectronics sees improvements in earnings and revenues for the coming quarters thanks to an increase in orders and the prospect of the ST-Ericsson joint venture halving its quarterly loss by the fourth quarter. At the end of April, ST-Ericsson, the company jointly owned by Stm and Ericsson, announced a review of its strategy aimed at cutting costs and improving revenues.
As a consequence Stm CEO Carlo Bozotti said yesterday he expects the reorganization to reduce ST-Ericsson's loss to around $140 million in the fourth quarter from approximately $280 million in the first three months, with an improvement in STM's net result of approximately $70 million in the fourth quarter. The French-Italian group reported a GAAP net loss of $176 million in the first quarter. “The improvement this year will be very significant,” Bozotti told Reuters in an interview after the company's investor day in New York.
The manager said the group is also seeing heavy orders for its chips which are used in products ranging from cell phones to cars. “There is a very widespread improvement trend,” he said.
Meanwhile, STMicro shares are on the stock exchange started the session sharply higher before partially trimming gains and mark a progress of 1% to 4,146 euros, after the highs of 4,188 euros.
