STMicroelectronics returns to profit in Q2

July 27, 2016 // By Peter Clarke
STMicroelectronics NV, one of Europe's largest chip companies, has announced a net profit on revenues that were down slightly year-on-year for the second quarter of 2016.

The second quarter revenues totaled $1.70 billion compared with $1.76 billion in 2Q15. The company made a net profit of $23 million in 2Q16 compared with a net profit of $35 million in 2Q15. The profit did contrast with a loss of $41 million in the previous quarter.

CEO Carlo Bozotti told analysts on a conference call that ST was now well positioned to show year-on-year growth in the second half of 2016.

"Sequential revenue growth came from the progress we are making on our areas of strategic focus, smart driving and Internet of Things," said Bozotti, in a statement. "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."

On a year-over-year basis, second quarter net revenues decreased 3.2 percent, or 1.7 percent excluding businesses undergoing a phase-out. These include mobile products, camera modules and set-top box ICs. As anticipated, automotive, including ADAS solutions, and microcontrollers, led by general purpose, continued to be strong, growing revenues about 6 and 4 percent, 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.

Analog and MEMS group (AMG) revenues decreased 15.4 percent compared to the year-ago period mainly due to lower wireless and computer peripheral applications sales. Bozotti predicted improved results for the AMG in the second half for both revenues and operating results.

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