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STMicroelectronics Ends Fiscal Year

PARIS — STMicroelectronics (NYSE: STM) reported financial results for the fourth quarter and full year ended December 31, 2010. President and CEO Carlo Bozotti commented, “ST had a very strong finish to the year. Our fourth quarter revenues came in near the top end of our range, increasing 6.6% sequentially on broad-based strength in analog, MEMS, microcontrollers and automotive applications. Our gross margin further increased to 39.9%, up 70 basis points sequentially, coming in above the midpoint of our guidance.

“ACCI and IMS again achieved record sales this quarter, accompanied by further improvements at the operating profit level, with ACCI operating margin increasing to 11.9% and IMS rising to 22.5%. In wireless, while operating losses remain very significant, ST-Ericsson has completed its restructuring and is now well on its way to complete the transition to its new product portfolio. Overall, ST's strong sales results, driven by our innovative product portfolio combined with our restructuring efforts, enabled ST to generate net earnings of $830 million for the year.

“In 2010, w e were well prepared to take advantage of significantly better industry conditions with the right portfolio and we have started to turn our vision of leadership in 'Sense and Power' applications and in multimedia convergence into reality. In the last eight quarters, ST went through the most severe economic recession in 2009 and successfully capitalized on the 2010 market recovery. Throughout this timeframe we remained focused on our growth and profitability objectives. Today, our innovative products, which have leadership positions in highly successful applications, customer base and solid capital structure, make us a much stronger company.”

(*) Net financial position 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.

Fourth Quarter Review

ST's net revenues for the fourth quarter of 2010 totaled $2,833 million and included sales recorded by ST-Ericsson as consolidated by ST.

Fourth quarter net revenues increased on a year-over-year basis by 30% in Industrial and Multisegment Sector (IMS), and 15% in Automotive/Consumer/Computer/Communication Infrastructure Sector (ACCI), while Wireless, reflecting the ongoing portfolio transition at ST-Ericsson, decreased by 21%. Overall fourth quarter net revenues increased by 9.7% on a year-over-year basis, geographically led by Greater China-South Asia with sales growth of 15% and the Americas with a 14% increase.

On a year-over-year basis, all market segments, except Telecom, posted growth, with Automotive up by 27%, Industrial & Other by 18%, Consumer by 14%, and Computer by 7%. Telecom declined by 7%. Distribution increased 25%.

Sequentially, revenues grew in all regions, led by Japan-Korea, Greater China-South Asia and Americas with 10%, 8% and 7% growth, respectively.

All market segments increased on a sequential basis, except Consumer, with Automotive higher by 16%, Industrial & Other by 13%, Computer by 10%, and Telecom by 7%. Consumer decreased by 6% on weakening demand. Distribution increased sequentially by 4%.

{complink 5218|STMicroelectronics NV}

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