STMicroelectronics Reports 2016 Second Quarter and First Half Financial Results

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Net revenues of $1.70 billion and gross margin of 33.9% in the second quarter Continued strength in automotive and microcontroller revenues; growing about 6% and 4% year-over-year, respectively Free cash flow(1) of $47 million in the second quarter; ...

  • Net revenues of $1.70 billion and gross margin of 33.9% in the second quarter
  • Continued strength in automotive and microcontroller revenues; growing about 6% and 4% year-over-year, respectively
  • Free cash flow(1) of $47 million in the second quarter; $78 million in the first half of 2016

Geneva, July 27, 2016 - STMicroelectronics (NYSE: STM), a global semiconductor leader serving customers across the spectrum of electronics applications, reported financial results for the second quarter and first half ended July 2, 2016.

Second quarter net revenues totaled $1.70 billion, gross margin was 33.9%, and net earnings were $0.03 per share.

"In the second quarter, we made another step towards our goal to return to year-over-year sales growth in the second half of 2016. Sequentially, revenues increased 5.6% and gross margin improved 50 basis points. We also made progress in our set-top box restructuring program and well managed our cash flow," commented Carlo Bozotti, STMicroelectronics President and Chief Executive Officer.

"Sequential revenue growth came from the progress we are making on our areas of strategic focus, Smart Driving and Internet of Things. Our automotive business enjoyed another strong quarter across all applications; our general purpose microcontroller business had another record billing performance, driven by STM32; our Time-of-Flight specialized image sensors entered multiple smartphone models and our power discretes started a broad-based recovery."

U.S. GAAP

(Million US$)
Q2 2016 Q1 2016 Q2 2015
Net Revenues 1,703 1,613 1,760
Gross Margin 33.9% 33.4% 33.8%
Operating Income (Loss) 28 (33) 12
Net Income (Loss) attributable to parent company 23 (41) 35

Non-U.S. GAAP(1)

(Million US$)
Operating Income (Loss) before impairment and restructuring charges 40 (5) 33
Free cash flow 47 31 53
Net financial position 426 439 459

 (1) Non-U.S. GAAP measure. See Appendix for reconciliation to U.S. GAAP and additional information explaining why the Company believes these measures are important.

Quarterly Financial Summary by Product Group

Product Group Data
(Million US$)
Q2 2016
Revenues
Q1 2016
Revenues
Q2 2015
Revenues
Automotive and Discrete Group (ADG) 721 671 714
Analog and MEMS Group (AMG) 376 369 445
Microcontrollers and Digital ICs Group (MDG) 556 532 558
Others (a) 50 41 43
Total 1,703 1,613 1,760
  1. Net revenues of "Others" includes revenues from sales of Imaging Product Division, Subsystems, assembly services, and other revenue.

Second Quarter Review

Second quarter net revenues increased 5.6% sequentially, above the midpoint of the Company's guidance. Automotive and Discrete Group (ADG) revenues, representing the largest product group of ST, increased 7.5% on a sequential basis driven by a strong recovery in demand for power discrete products and continued and broad-based strength in automotive products. Microcontrollers and Digital ICs Group (MDG) increased 4.6% on a sequential basis driven by general purpose microcontrollers and digital ASICs for networking applications. Analog and MEMS Group (AMG) revenues increased sequentially 1.8% driven by analog products partially offset by lower sales of MEMS products. Specialized image sensors, reported in Others, registered a strong sequential revenue growth.

On a year-over-year basis, second quarter net revenues decreased 3.2%, or 1.7% excluding businesses undergoing a phase-out (mobile legacy products, camera modules and set-top box). As anticipated, automotive, including ADAS solutions, and microcontrollers, led by general purpose, continued to be strong, growing revenues about 6% and 4%, respectively, compared to the year-ago quarter. In the second quarter, specialized image sensors posted year-over-year growth. Power discretes, still impacted by weaker market conditions compared to the year-ago period, decreased as did digital reflecting the discontinued product lines. AMG revenues decreased 15.4% compared to the year-ago period mainly due to lower wireless and computer peripheral applications sales.

All regions grew revenues sequentially, led by the Americas up by 9.6%, Asia Pacific up by 5.1% and EMEA up by 4.6%. On a year-over-year basis, EMEA grew 4.6% while the Americas and Asia Pacific decreased by 3.6% and 6.7%, respectively.

Second quarter gross profit was $577 million. The gross margin was 33.9%, and included about 45 basis points of unused capacity charges. On a sequential basis, gross margin increased 50 basis points on manufacturing efficiencies and improved product mix partially offset principally by price pressure.

Combined R&D and SG&A expenses were $565 million, decreasing by $6 million on a sequential basis, benefiting from fewer calendar days and the initial benefits of the set-top box restructuring plan, partially offset by unfavorable currency effects, net of hedging, in the second quarter.

Second quarter other income and expenses, net, registered income of $28 million mainly due to R&D funding.

Second quarter operating income before impairment and restructuring charges(1) improved sequentially to $40 million from a loss of $5 million, mainly due to higher revenues and higher gross profit. On a year-over-year basis, operating income improved by $7 million reflecting favorable currency effects, net of hedging, improved product mix, manufacturing efficiencies and lower operating expenses partially offset by lower revenues and lower R&D grants.

Impairment and restructuring charges in the second quarter were $12 million related to the set-top box restructuring plan.

Earnings on equity investments reflected a one-time net income of $9 million in the second quarter. Second quarter net profit was $23 million, equivalent to $0.03 per share, compared to a net loss of $41 million in the prior quarter and a net income of $35 million in the year-ago quarter, which included a one-time income tax benefit.

First Half Financial Summary by Product Group

Product Group Data
(Million US$)
H1 2016
Revenues
H1 2015
Revenues
Automotive and Discrete Group (ADG) 1,392 1,388
Analog and MEMS Group (AMG) 745 890
Microcontrollers and Digital ICs Group (MDG) 1,089 1,088
Others 90 99
Total 3,316 3,465

First Half 2016 Review

In total, net revenues in the first half 2016 decreased 4.3% to $3.32 billion from $3.47 billion in the 2015 first half, or 2.5% excluding businesses undergoing a phase-out (mobile legacy products, camera modules and set-top box). By product group, ADG was higher by 0.3% on solid growth in automotive products offset to a large measure by lower discrete sales; MDG revenues were flat compared to the year-ago period and AMG decreased 16.2%, principally due to lower sales of MEMS.

Gross margin in the first half 2016 improved to 33.6% from 33.5% in the year-ago period despite lower revenues. Specifically, the 2016 first half gross margin benefited from favorable currency effects, net of hedging, manufacturing efficiencies and lower unused capacity charges substantially offset by price pressure.

First half 2016 operating income before impairment and restructuring charges(1) was $35 million, compared to $43 million in the year-ago period on mixed performances by group and product families. ADG operating performance improved due to both higher revenues and mix improvements in comparison to the year-ago period. MDG operating margin turned positive due to lower sales of low margin set-top box products and the initial savings from the set-top box restructuring plan. However, AMG operating results decreased mainly due to lower sales.

Combined R&D and SG&A expenses were $1.14 billion compared to $1.19 billion in the year-ago period mainly reflecting lower R&D costs due to favorable currency effects, net of hedging, and the benefits of the set-top box restructuring plan and savings plan completed in 2015.

Other income and expenses, net, registered income of $55 million compared to $73 million in the year-ago period mainly due to lower R&D funding.

First half impairment and restructuring charges were $40 million and principally related to the initial phase of the set-top box restructuring plan, compared to $50 million in the year-ago period.

First half of 2016 net loss, as reported, was $18 million, equivalent to negative $0.02 per share, compared to a net income of $12 million, or $0.01 per share in the first half of 2015.

(1)Non-U.S. GAAP measure. See Appendix for additional information and reconciliation to U.S. GAAP.

Cash Flow and Balance Sheet Highlights

Capital expenditure payments, net of proceeds from sales, were $136 million and $236 million during the second quarter and first half of 2016, respectively. First half 2015 capital expenditures were $250 million.

Inventory was $1.27 billion at quarter end, down 3% from the prior quarter. Inventory in the second quarter of 2016 was at 3.6 turns or 100 days.

The Company paid cash dividends totaling $57 million and $145 million for the second quarter and first half of 2016, respectively.

ST's net financial position(1) was $426 million at July 2, 2016 compared to $439 million at April 2, 2016. ST's total financial resources equaled $2.03 billion and total financial debt was $1.60 billion at July 2, 2016.

Total equity, including non-controlling interest, was $4.56 billion at July 2, 2016.

(1)Non-U.S. GAAP measure. See Appendix for additional information and reconciliation to U.S. GAAP.

Third Quarter 2016 Business Outlook

Mr. Bozotti commented, "The strategic choices we have made position us for a strong third quarter. Our backlog is currently underpinned by a healthy demand in the markets we serve. This makes us confident we can grow revenues sequentially and, in H2 2016, year-over-year. We expect that in the second half of 2016, power discretes and AMG (Analog and MEMS Group) will restart year-over-year growth and that automotive, microcontrollers and imaging will continue their positive revenue momentum. At the same time we remain vigilant due to the macro-economic uncertainties, especially in Europe, which could impact overall GDP and semiconductor demand".

"Based on these factors, we anticipate a sequential increase in net revenues by about 5.5% at the mid-point, and the gross margin to be about 35.5% at the mid-point".

The Company expects third quarter 2016 revenues to increase about 5.5% on a sequential basis, plus or minus 3.5 percentage points. Gross margin in the third quarter is expected to be about 35.5% plus or minus 2.0 percentage points and reflects unsaturation charges negatively impacting gross margin by about 65 basis points.

This outlook is based on an assumed effective currency exchange rate of approximately $1.12 = €1.00 for the 2016 third quarter and includes the impact of existing hedging contracts. The third quarter will close on October 1, 2016.

Recent Corporate Developments 

  • On May 25, ST announced that all of the resolutions were approved at the Company's Annual General Meeting of Shareholders (AGM). The main resolutions, approved by the shareholders, were:
  • The adoption of the Company's Statutory Annual Accounts for the year ended December 31, 2015, prepared in accordance with International Financial Reporting Standards (IFRS);
     
  • The distribution of a cash dividend of US$0.24 per outstanding share of the Company's common stock, to be distributed in quarterly installments of US$0.06 in each of the second, third and fourth quarters of 2016 and first quarter of 2017 to shareholders of record in the month of each quarterly payment;
     
  • The appointment of Mr. Salvatore Manzi as a member of the Supervisory Board, for a three-year term expiring at the 2019 AGM, in replacement of Mr. Alessandro Ovi whose mandate expired as of the 2016 AGM;
     
  • The reappointment of Ms. Janet Davidson as a member of the Supervisory Board for a three-year term, expiring at the 2019 AGM;
     
  • The delegation to the Supervisory Board of the authority to issue new common and preference shares, to grant rights to subscribe for such shares and to limit and/or exclude existing shareholders' pre-emptive rights on common shares for a period of eighteen months; and
     
  • Authorization to our Managing Board, for eighteen months following the AGM, to repurchase our shares, subject to the approval of our Supervisory Board.
     
  • On May 26, ST announced the publication of the Company's 2015 Sustainability Report.  The Company's nineteenth annual report contains details of ST's sustainability strategy and its 2015 performance.

Q2 2016 - Product and Technology Highlights

Automotive and Discrete Group (ADG)

  • Awarded a complete anti-lock brake chipset, including a 32-bit microcontroller, for a motorbike application from a major Japanese tier1;
  • Continued expansion of 32-bit automotive microcontroller business with a major award from a Japanese tier 1 for a networking gateway with embedded security;
  • Landed a win for a next-generation airbag smart-power chipset from two major Japanese tier 1 players for a leading Japanese carmaker;
  • Earned awards for class AB amplifiers from major tier 1s for multiple infotainment head-unit applications for a leading American carmaker;
  • Recorded important design-wins for ESD protection devices from smartphone and wearable market leaders in the US and Asia;
  • Collected multiple design wins for common-mode filters and high-speed HDMI protection devices with tablet and PC market leaders;
  • Won multiple designs from several players for super-junction and SiC MOSFET product families across a range of applications including servers, solar, gaming systems, and dc/dc converters;
  • Started a collaboration with a major Japanese tier 1 for a surround-view camera system;
  • Announced the development of the 5th generation system-on-chip for Mobileye in sub-10nm technology.

Analog and MEMS Group (AMG)

       MEMS & Sensors

  • Ramped production of 6-axis ultra-low-power MEMS accelerometer and gyroscope, optical-image-stabilization gyroscope, and barometric sensor for latest Samsung Galaxy smartphones, including Samsung Galaxy S7 and S7 edge;
  • Booked multiple Automotive design wins for custom MEMS accelerometer in Japan and for 3-axis automotive gyroscope from a top tier-1 supplier for an American manufacturer;
  • Landed multiple design wins for 6-axis single- and dual-core inertial measurement units for user interface and optical image stabilization from numerous Chinese manufacturers and for applications like sportwatches from wearable players;
  • Increased presence in optical image stabilization with our latest low-noise gyroscope;
  • Announced collaboration with Qualcomm on sensors for smart mobile devices;
  • Awarded socket for ultra-low-power, high performance 3-axis accelerometer for anti-tampering protection in smart meters;
  • Ramped production of newest pressure sensor for wearable and smartphone applications for leading Asia-Pacific suppliers;
  • Launched production of ultra-low-power smart accelerometer with embedded pedometer for a Chinese manufacturer and for a children's watch application.

       Analog

  • Initiated volume production of next-generation smart meters for Enel;
  • Introduced latest-generation single-chip Bluetooth Low Energy Chip (SoC) that delivers a performance edge at a cost-effective price;
  • Ramped shipments of latest motion-control chip (STSPIN) for a new high-performance drone from a well-known Chinese manufacturer;
  • Began production of wireless-charger IC for an edgy, youth-targeted smart watch;
  • Continued proliferation of latest-generation touchscreen sensor with multiple design wins for mobile applications in China and Asia Pacific.

Microcontrollers and Digital ICs Group (MDG)

  • Made significant progress in the drone market with STM32 family design-ins from several major drone manufacturers for in-flight and motor control;
  • Captured design-in for STM32F0 at a major European lighting manufacturer;
  • Won an FD-SOI ASIC design from a major Japanese player;
  • Recorded several 55nm BiCMOS design wins, including a trans-impedance amplifier at a major Chinese ASIC house and two ASICs from a leading network optical module supplier;
  • Began production ramp of dynamic NFC tags along with high-density EEPROMs for a major European smart-meter program;
  • Ramped production of ST's first silicon photonic transceiver for a networking module manufacturer to upgrade a leading datacenter operator to 100Gbit/sec;
  • Started H9 RF-SOI volume production for a smartphone Front-End Module (FEM) ASIC for a Chinese customer;
  • Achieved milestone two billionth STM8 units shipped, less than two years after passing the one billion unit mark in May 2014;
  • Launched cooperation with Arduino to expand maker-community access to STM32 MCUs;
  • Revealed a cooperation with Securitag Assembly Group (SAG) to deliver high-performance, tiny NFC tags for IoT applications;
  • Unveiled USB Type-C 1.2 and USB Power Delivery 2.0 middleware stack for the STM32;
  • Announced free development tools to enable STM32 developers access from all desktops environments (Linux and OS-X, in addition to Windows);
  • Qualified and certified to Common Criteria the ST31G480 dual-interface secure microcontroller;
  • Introduced the STSAFE-A100 secure element to protect connected devices in the Internet of Things (IoT) and certified STSAFE-TPM (Trusted Platform Module) to Common Criteria and TCG 1.2 & 2.

Imaging Product Division (IMD)

  • Recorded multiple design-wins for the just-announced VL53L0 Time-of-Flight ranging sensor for auto-focus applications in the flagship smartphones of Huawei and other leading Asian manufacturers.

Use of Supplemental Non-U.S. GAAP Financial Information

This press release contains supplemental non-U.S. GAAP financial information, including operating income (loss) before impairment and restructuring charges, operating margin before impairment and restructuring charges, adjusted net earnings per share, free cash flow and net financial position.

Readers are cautioned that these measures are unaudited and not prepared in accordance with U.S. GAAP and should not be considered as a substitute for U.S. GAAP financial measures. In addition, such non-U.S. GAAP financial measures may not be comparable to similarly titled information by other companies.

See the Appendix of this press release for a reconciliation of the Company's non-U.S. GAAP financial measures to their corresponding U.S. GAAP financial measures. To compensate for these limitations, the supplemental non-U.S. GAAP financial information should not be read in isolation, but only in conjunction with the Company's consolidated financial statements prepared in accordance with U.S. GAAP.

Forward-looking information

Some of the statements contained in this release that are not historical facts are statements of future expectations and other forward-looking statements (within the meaning of Section 27A of the Securities Act of 1933 or Section 21E of the Securities Exchange Act of 1934, each as amended) that are based on management's current views and assumptions, and are conditioned upon and also involve known and unknown risks and uncertainties that could cause actual results, performance, or events to differ materially from those anticipated by such statements, due to, among other factors:

  • Uncertain macro-economic and industry trends, which may impact end-market demand for our products;
  • Customer demand that differs from projections;
  • The ability to design, manufacture and sell innovative products in a rapidly changing technological environment;
  • Unanticipated events or circumstances, which may impact our ability to execute the planned reductions in our net operating expenses and / or meet the objectives of our R&D Programs, which benefit from public funding;
  • Changes in economic, social, labor, political, or infrastructure conditions in the locations where we, our customers, or our suppliers operate, including as a result of macro-economic or regional events, military conflicts, social unrest, labor actions, or terrorist activities;
  • The Brexit vote and the perceptions as to the impact of the withdrawal of the U.K. may adversely affect business activity, political stability and economic conditions in the U.K., the Eurozone, the EU and elsewhere. While we do not have material operations in the U.K. and have not experienced any material impact from Brexit on our underlying business to date, we cannot predict its future implications;
  • Financial difficulties with any of our major distributors or significant curtailment of purchases by key customers;
  • The loading, product mix, and manufacturing performance of our production facilities;
  • The functionalities and performance of our IT systems, which support our critical operational activities including manufacturing, finance and sales, and any breaches of our IT systems or those of our customers or suppliers;
  • Variations in the foreign exchange markets and, more particularly, the U.S. dollar exchange rate as compared to the Euro and the other major currencies we use for our operations;
  • The impact of intellectual property ("IP") claims by our competitors or other third parties, and our ability to obtain required licenses on reasonable terms and conditions;
  • The ability to successfully restructure underperforming business lines and associated restructuring charges and cost savings that differ in amount or timing from our estimates;
  • Changes in our overall tax position as a result of changes in tax laws, the outcome of tax audits or changes in international tax treaties which may impact our results of operations as well as our ability to accurately estimate tax credits, benefits, deductions and provisions and to realize deferred tax assets;
  • The outcome of ongoing litigation as well as the impact of any new litigation to which we may become a defendant;
  • Product liability or warranty claims, claims based on epidemic or delivery failure, or other claims relating to our products,  or recalls by our customers for products containing our parts;
  • Natural events such as severe weather, earthquakes, tsunamis, volcano eruptions or other acts of nature, health risks and epidemics in locations where we, our customers or our suppliers operate;
  • Availability and costs of raw materials, utilities, third-party manufacturing services and technology, or other supplies required by our operations.

Such forward-looking statements are subject to various risks and uncertainties, which may cause actual results and performance of our business to differ materially and adversely from the forward-looking statements. Certain forward-looking statements can be identified by the use of forward looking terminology, such as "believes," "expects," "may," "are expected to," "should," "would be," "seeks" or "anticipates" or similar expressions or the negative thereof or other variations thereof or comparable terminology, or by discussions of strategy, plans or intentions.

Some of these risk factors are set forth and are discussed in more detail in "Item 3. Key Information - Risk Factors" included in our Annual Report on Form 20-F for the year ended December 31, 2015, as filed with the SEC on March 16, 2016. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in this release as anticipated, believed, or expected. We do not intend, and do not assume any obligation, to update any industry information or forward-looking statements set forth in this release to reflect subsequent events or circumstances.

STMicroelectronics Conference Call and Webcast Information

On July 27, 2016, the management of STMicroelectronics will conduct a conference call to discuss the Company's operating performance for the second quarter of 2016.

The conference call will be held at 9:30 a.m. CET / 8:30 a.m. BST / 3:30 a.m. U.S. Eastern Time (ET) / 12:30 a.m. U.S. Pacific Time (PT). The conference call will be available live via the Internet by accessing http://investors.st.com. Those accessing the webcast should go to the Web site at least 15 minutes prior to the call, in order to register, download and install any necessary audio software. The webcast replay will be available until August 12, 2016.

About STMicroelectronics
ST is a global semiconductor leader delivering intelligent and energy-efficient products and solutions that power the electronics at the heart of everyday life. ST's products are found everywhere today, and together with our customers, we are enabling smarter driving and smarter factories, cities and homes, along with the next generation of mobile and Internet of Things devices. By getting more from technology to get more from life, ST stands for life.augmented.

In 2015, the Company's net revenues were $6.90 billion, serving more than 100,000 customers worldwide. Further information can be found at www.st.com

For further information, please contact:

INVESTOR RELATIONS:
Tait Sorensen                                       
Group VP, Investor Relations
STMicroelectronics
Tel: +1 602 485 2064
tait.sorensen@st.com

MEDIA RELATIONS:
Nelly Dimey                                         
Director, Corporate Media and Public Relations
Tel: + 33 1 58 07 77 85
nelly.dimey@st.com



STMicroelectronics N.V.    
Consolidated Statements of Income    
(in millions of U.S. dollars, except per share data ($))    
     
  Three Months Ended
  (Unaudited) (Unaudited)
  July 02, June 27,
  2016 2015
     
Net sales   1,698   1,754
Other revenues   5   6
  NET REVENUES   1,703   1,760
Cost of sales   (1,126)   (1,165)
  GROSS PROFIT   577   595
Selling, general and administrative   (229)   (226)
Research and development   (336)   (373)
Other income and expenses, net   28   37
Impairment, restructuring charges and other related closure costs   (12)   (21)
  Total Operating Expenses   (549)   (583)
  OPERATING INCOME   28   12
Interest expense, net   (6)   (6)
Income (loss) on equity-method investments   9   (1)
INCOME BEFORE INCOME TAXES   31   5
  AND NONCONTROLLING INTEREST    
Income tax benefit (expense)   (6)   31
  NET INCOME   25   36
Net loss (income) attributable to noncontrolling interest   (2)   (1)
  NET INCOME ATTRIBUTABLE TO PARENT COMPANY   23   35
     
  EARNINGS PER SHARE (BASIC) ATTRIBUTABLE TO PARENT COMPANY STOCKHOLDERS   0.03   0.04
  EARNINGS PER SHARE (DILUTED) ATTRIBUTABLE TO PARENT COMPANY STOCKHOLDERS   0.03   0.04
     
  NUMBER OF WEIGHTED AVERAGE    
  SHARES USED IN CALCULATING    
  DILUTED EARNINGS PER SHARE 885.5 880.2

 


 

STMicroelectronics N.V.    
Consolidated Statements of Income    
(in millions of U.S. dollars, except per share data ($))    
     
  Six Months Ended
  (Unaudited) (Unaudited)
  July 02, June 27,
  2016 2015
     
Net sales   3,303   3,447
Other revenues   13   18
  NET REVENUES   3,316   3,465
Cost of sales   (2,201)   (2,305)
  GROSS PROFIT   1,115   1,160
Selling, general and administrative   (457)   (448)
Research and development   (678)   (742)
Other income and expenses, net   55   73
Impairment, restructuring charges and other related closure costs   (40)   (50)
  Total Operating Expenses   (1,120)   (1,167)
  OPERATING LOSS   (5)   (7)
Interest expense, net   (11)   (11)
Income (loss) on equity-method investments   9   3
 LOSS BEFORE INCOME TAXES   (7)   (15)
  AND NONCONTROLLING INTEREST    
Income tax benefit (expense)   (8)   30
  NET INCOME (LOSS)   (15)   15
Net loss (income) attributable to noncontrolling interest   (3)   (3)
  NET INCOME (LOSS) ATTRIBUTABLE TO PARENT COMPANY   (18)   12
     
  EARNINGS PER SHARE (BASIC) ATTRIBUTABLE TO PARENT COMPANY STOCKHOLDERS   (0.02)   0.01
  EARNINGS PER SHARE (DILUTED) ATTRIBUTABLE TO PARENT COMPANY STOCKHOLDERS   (0.02)   0.01
     
  NUMBER OF WEIGHTED AVERAGE    
  SHARES USED IN CALCULATING    
  EARNINGS PER SHARE 879.2 879.6

 

 


 

STMicroelectronics N.V.      
CONSOLIDATED BALANCE SHEETS      
As at July 02, April 02, December 31,
In millions of U.S. dollars 2016 2016 2015
  (Unaudited) (Unaudited) (Audited)
ASSETS      
Current assets:      
Cash and cash equivalents 1,682 1,697 1,771
Restricted cash - - 4
Marketable securities 345 343 335
Trade accounts receivable, net 886 891 820
Inventories 1,266 1,302 1,251
Deferred tax assets 78 99 91
Assets held for sale -   - 1
Other current assets 424 468 407
Total current assets 4,681 4,800 4,680
Goodwill 77 79 76
Other intangible assets, net 153 162 166
Property, plant and equipment, net 2,290 2,333 2,321
Non-current deferred tax assets 465 458 436
Long-term investments 57 57 57
Other non-current assets 394 492 459
  3,436 3,581 3,515
Total assets 8,117 8,381 8,195
       
LIABILITIES AND EQUITY      
Current liabilities:      
Short-term debt 171 173 191
Trade accounts payable 597 666 525
Other payables and accrued liabilities 654 692 703
Dividends payable to stockholders 165 10 97
Deferred tax liabilities 1 4 2
Accrued income tax 29 52 42
Total current liabilities 1,617 1,597 1,560
Long-term debt 1,430 1,428 1,421
Post-employment benefit obligations 359 367 351
Long-term deferred tax liabilities 13 11 12
Other long-term liabilities 139 161 158
  1,941 1,967 1,942
Total liabilities 3,558 3,564 3,502
Commitment and contingencies      
Equity      
Parent company stockholders' equity      
Common stock (preferred stock: 540,000,000 shares authorized, not issued; common stock: Euro 1.04 nominal value, 1,200,000,000 shares authorized, 910,970,920 shares issued, 883,268,414 shares outstanding) 1,157 1,157 1,157
Capital surplus 2,798 2,790 2,779
Retained earnings 249 483 525
Accumulated other comprehensive income 534 612 460
Treasury stock (243) (288) (289)
Total parent company stockholders' equity 4,495 4,754 4,632
Noncontrolling interest 64 63 61
Total equity 4,559 4,817 4,693
Total liabilities and equity 8,117 8,381 8,195

 


 

STMicroelectronics N.V.      
       
SELECTED CASH FLOW DATA      
       
Cash Flow Data (in US$ millions) Q2 2016 Q1 2016 Q2 2015
       
Net Cash from operating activities   191   141   223
Net Cash used in investing activities   (144)   (110)   (190)
Net Cash used in financing activities   (60)   (107)   (94)
Net Cash decrease   (15)   (74)   (62)
       
Selected Cash Flow Data (in US$ millions) Q2 2016 Q1 2016 Q2 2015
       
Depreciation & amortization   179 184 181
Net payment for Capital expenditures   (136)   (100)   (161)
Dividends paid to stockholders   (57)   (88)   (93)
Change in inventories, net   20   (22)   (32)

 


Appendix
STMicroelectronics
Supplemental Financial Information

In the first quarter of 2016, ST realigned its product families into three product groups to better leverage the product synergies around its strategic focus on Smart Driving and Internet of Things applications: Automotive and Discrete Group (ADG); Analog and MEMS Group (AMG) and Microcontrollers and Digital ICs Group (MDG). MDG includes ST's set-top-box business which is currently undergoing a restructuring targeting annualized savings of $170 million upon completion. All prior-period amounts have been retrospectively aligned to the 2016 reporting segments.

Product Group Data

(Million US$)
Q2

2016
Q1 2016 H1 2016 Q2 2015 Q1 2015 H1

2015
Automotive and Discrete Group (ADG)            
 - Net Revenues 721 671 1,392 714 674 1,388
 - Operating Income (Loss) 61 39 100 46 36 82
Analog and MEMS Group (AMG)            
 - Net Revenues 376 369 745 445 445 890
 - Operating Income (Loss) 1 2 3 30 37 68
Microcontrollers and Digital ICs Group (MDG)            
 - Net Revenues 556 532 1,089 558 530 1,088
 - Operating Income (Loss) 9 (3) 5 (1) (28) (29)
Others (a)            
 - Net Revenues 50 41 90 43 56 99
 - Operating Income (Loss) (43) (71) (113) (63) (64) (128)
Total            
 - Net Revenues 1,703 1,613 3,316 1,760 1,705 3,465
 - Operating Income (Loss) 28 (33) (5) 12 (19) (7)

(a(a(a) Net revenues of "Others" includes revenues from sales of Imaging Product Division, Subsystems, assembly services, and other revenue. Operating income (loss) of "Others" includes items such as unused capacity charges, impairment, restructuring charges and other related closure costs, phase out and start-up costs, and other unallocated expenses such as: strategic or special research and development programs, certain corporate-level operating expenses, patent claims and litigations, and other costs that are not allocated to product groups, as well as operating earnings of the Imaging Product Division, Subsystems and other products. "Others" includes $8 million, $10 million, $9 million and $19 million of unused capacity charges in the second and first quarters of 2016 and 2015, respectively; and $12 million, $28 million, $21 million and $29 million of impairment, restructuring charges, and other related closure costs in the second and first quarters of 2016 and 2015, respectively.

  Q2 2016 Q1 2016 H1

2016
Q2 2015 Q1

2015
H1 2015
€/$ Effective Rate 1.12 1.10 1.11 1.17 1.23 1.20

Net Revenues By Market Channel(%) Q2 2016 Q1 2016 H1 2016 Q2 2015 Q1 2015 H1 2015
Total OEM 66% 67% 67% 67% 70% 68%
Distribution 34% 33% 33% 33% 30% 32%

(Appendix - continued)
STMicroelectronics
Supplemental Non-U.S. GAAP Financial Information
U. S. GAAP - Non-U.S. GAAP Reconciliation
In Million US$ Except Per Share Data

The supplemental non-U.S. GAAP information presented in this press release is unaudited and subject to inherent limitations. Such non-U.S. GAAP information is not based on any comprehensive set of accounting rules or principles and should not be considered as a substitute for U.S. GAAP measurements. Also, our supplemental non-U.S. GAAP financial information may not be comparable to similarly titled non-U.S. GAAP measures used by other companies. Further, specific limitations for individual non-U.S. GAAP measures, and the reasons for presenting non-U.S. GAAP financial information, are set forth in the paragraphs below. To compensate for these limitations, the supplemental non-U.S. GAAP financial information should not be read in isolation, but only in conjunction with our consolidated financial statements prepared in accordance with U.S. GAAP.

Operating income (loss) before impairment and restructuring charges and one-time items is used by management to help enhance an understanding of ongoing operations and to communicate the impact of the excluded items, such as impairment, restructuring charges and other related closure costs. Adjusted net earnings and earnings per share (EPS) are used by management to help enhance an understanding of ongoing operations and to communicate the impact of the excluded items like impairment, restructuring charges and other related closure costs attributable to ST and other one-time items, net of the relevant tax impact.

The Company believes that these non-GAAP financial measures provide useful information for investors and management because they measure the Company's capacity to generate profits from its business operations, excluding the effect of acquisitions and expenses related to the rationalizing of its activities and sites that it does not consider to be part of its on-going operating results, thereby offering, when read in conjunction with the Company's GAAP financials, (i) the ability to make more meaningful period-to-period comparisons of the Company's on-going operating results, (ii) the ability to better identify trends in the Company's business and perform related trend analysis, and (iii) an easier way to compare the Company's results of operations against investor and analyst financial models and valuations, which usually exclude these items.

Q2 2016

(US$ millions and cents per share)
Gross Profit Operating Income (loss) Net Earnings Corresponding EPS
U.S. GAAP 577 28 23 0.03
Impairment & Restructuring   12 12  
Estimated Income Tax Effect     (2)
Non-U.S GAAP 577 40 33 0.04

Q1 2016

(US$ millions and cents per share)
Gross Profit Operating Income (loss) Net Earnings Corresponding EPS
U.S. GAAP 538 (33) (41) (0.05)
Impairment & Restructuring   28 28  
Estimated Income Tax Effect     (3)
Non-U.S GAAP 538 (5) (16) (0.02)

Q2 2015

(US$ millions and cents per share)
Gross Profit Operating Income (loss) Net Earnings Corresponding EPS
U.S. GAAP 595 12 35 0.04
Impairment & Restructuring   21 21  
Estimated Income Tax Effect     (1)
Non-U.S GAAP 595 33 55 0.06

(continued)
(Appendix - continued)

Net financial position: resources (debt), represents the balance between our total financial resources and our total financial debt. Our total financial resources include cash and cash equivalents, marketable securities, short-term deposits and restricted cash, and our total financial debt includes short-term borrowings, current portion of long-term debt and long-term debt, all as reported in our consolidated balance sheet. We believe our net financial position provides useful information for investors because it gives evidence of our global position either in terms of net indebtedness or net cash position by measuring our capital resources based on cash, cash equivalents and marketable securities and the total level of our financial indebtedness. Net financial position is not a U.S. GAAP measure.

Net Financial Position (in US$ millions) July 2, 2016 April 2, 2016 June 27, 2015
Cash and cash equivalents 1,682 1,697 1,887
Restricted cash - - 20
Marketable securities 345 343 334
Total financial resources 2,027 2,040 2,241
Short-term debt (171) (173) (201)
Long-term debt (1,430) (1,428) (1,581)
Total financial debt (1,601) (1,601) (1,782)
Net financial position - Non-U.S. GAAP 426 439 459

Free cash flow is defined as net cash from operating activities minus net cash from (used in) investing activities, excluding payment for purchases (proceeds from the sale of) marketable securities and short-term deposits, restricted cash and net cash variation for joint ventures deconsolidation. We believe free cash flow provides useful information for investors and management because it measures our capacity to generate cash from our operating and investing activities to sustain our operating activities. Free cash flow is not a U.S. GAAP measure and does not represent total cash flow since it does not include the cash flows generated by or used in financing activities. In addition, our definition of free cash flow may differ from definitions used by other companies.

Free cash flow (in US$ millions) Q2 2016 Q1 2016 H1 2016 Q2 2015 Q1 2015 H1 2015
Net cash from operating activities 191 141 332 223 149 372
Net cash used in investing activities (144) (110) (254) (190) (108) (298)
Payment for purchase and proceeds from sale of marketable securities, investment in short-term deposits, restricted cash and net cash variation for joint ventures deconsolidation - - - 20 - 20
Free cash flow - Non-U.S. GAAP 47 31 78 53 41 94

 

--end---




This announcement is distributed by NASDAQ OMX Corporate Solutions on behalf of NASDAQ OMX Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: STMicroelectronics via Globenewswire

HUG#2030860

Source(s) : STMicroelectronics

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