ST posts $2.5B revenues for Q3

STMicroelectronics (ST) reported that net revenues for Q3 were $2.5 billion, 11.8 percent above the $2.24 billion reported in the same quarter last year.

The year-over-year growth was driven by double-digit increases in the telecom, industrial and consumer market segments, the company said. Sequentially, net revenues grew 0.7 percent from the $2.49 billion reported in the prior quarter, with the growth coming from industrial, consumer and application-specific wireless products.

According to the company, gross profit was at $904 million for Q3, an increase of $138 million from $766 million in 2005 Q3. Gross margin was 36.0 percent in the third quarter, an increase of 190 basis points from 34.1 percent in last year's third quarter. On a sequential basis, gross profit and gross margin increased from the second quarter levels of $882 million and 35.4 percent, respectively.

Combined selling, general and administrative and R&D expenses represented 27.2 percent of net revenues in Q3, compared to 28.9 percent in the year-ago quarter and 27 percent in the previous quarter. R&D expenses of $421 million were 3 percent higher than the $408 million in the prior quarter, reflecting increased effort in process technology and dedicated products.

In addition, the company reported operating income of $194 million, an operating margin of 7.7 percent, and net income of $207 million, or 22 cents per diluted share. In the year-ago quarter, ST reported operating income of $102 million, equal to an operating margin of 4.5 percent, and net income of $89 million or 10 cents per share. In the prior quarter, it reported operating income of $169 million, operating margin of 6.8 percent, and net income of $168 million or $0.18 per diluted share.

"ST is making important progress across our three major initiatives—product portfolio, market share, and returns on invested capital," said Carlo Bozotti, ST president and CEO. "ST is making important progress across our three major initiatives—product portfolio, market share, and returns on invested capital."