In total, STMicroelectronics (Geneva) plans to reduce its costs by over $700 million in 2009. The actions are focused on ''resizing'' the company's manufacturing operations and streamlining expenses. The company also set a capital spending budget of about $500 million for 2009, representing a 50 percent reduction in comparison to 2008.

The company also reported sales of $2.276 billion in the fourth quarter of 2008, compared to $2.696 billion in the third period and $2.742 billion in the like period a year ago.

Reflecting the sharp downturn in the global economy, the company said fourth-quarter net revenues decreased 15.6 percent sequentially and 17 percent year-over-year, ''driven by significant weakness across most geographies and market segments, in particular automotive, telecom and computer.''

For the 2008 fourth quarter, the company reported an operating loss of $139 million and a net loss of $366 million, or minus $0.42 per share, compared to the year-ago quarter operating loss of $15 million and net income of $20 million, or $0.02 per diluted share. In the previous quarter, ST lost $289 million or minus $1.54 a share.

Fourth quarter 2008 restructuring and impairment charges totaled $91 million and largely related to previously committed restructuring programs. ST-NXP Wireless, a joint venture owned 80 percent by ST, is consolidated into ST's operating results. The fourth and third quarter 2008 financial review includes the ST-NXP Wireless joint venture.

In a statement, President and CEO Carlo Bozotti said: "Fourth quarter net revenues came in at the mid-point of our updated outlook and reflected the accelerated level of order push-outs and cancellations and decrease in demand as the quarter progressed.''

Net revenues for the full year were $9.84 billion compared to 2007 revenues of $10.0 billion. Net loss, as reported, was $786 million in 2008, or minus $0.88 per share, compared to a net loss of $477 million, or minus $0.53 per share in 2007.

Net loss included pre-tax restructuring and impairment charges ($481 million), in-process R&D costs ($97 million), inventory step-up charges from NXP Wireless purchase accounting ($88 million), other-than-temporary impairment charge on financial assets ($138 million) and the impairment related to the Numonyx equity investment ($480 million) of $1,284 million with a tax impact of $141 million ($1.28 impact to earnings per diluted share in total) and $1,295 million ($1.29 impact to earnings per diluted share impact in total) for 2008 and 2007, respectively.  

By: DocMemory
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