PR No. C2842C
STMicroelectronics Reports 2017 Fourth Quarterand Abounding Year Banking Results
Geneva, January 25, 2018 – STMicroelectronics (NYSE: STM), a all-around semiconductor baton confined barter above the spectrum of electronics applications, appear banking after-effects for the fourth division and abounding year concluded December 31, 2017.
Fourth division net revenues totaled $2.47 billion, gross allowance was 40.6%, and net assets was $308 actor or $0.34 adulterated antithesis per share.
“ST delivered a able accomplishment to 2017. Fourth division net revenues were up 32.6% year-over-year with double-digit advance above all artefact groups, gross allowance accomplished 40.6%, and operating allowance was at 16.5%,” commented Carlo Bozotti, STMicroelectronics President & CEO. “On a consecutive basis, fourth division revenues grew decidedly bigger than melancholia at 15.5% and were 200 base credibility aloft the high-end of our guidance, mainly acknowledgment to college than accepted revenues in Imaging articles and Microcontrollers.
“Full Year 2017 net revenues added 19.7% on able advance above all artefact groups and geographies; gross allowance broadcast 400 base points, operating allowance added 880 base credibility to 11.9% and net assets bigger by $637 actor to $802 million.
“This acknowledged year additionally apparent the 30th ceremony of the accumulation of ST. We bless this anniversary with a solid artefact administration in Internet of Things, Smartphones, Industrial and Acute Active applications, a able bazaar position with aloft barter and in Distribution, a world-class aggregation of affianced employees, a acceptable banking achievement and an industry-leading acknowledgment on invested capital.”
Financial Summary (US$ Million)
(1) Non-U.S. GAAP measure. See Appendix for adaptation to U.S. GAAP and added advice answer why the Aggregation believes these measures are important.
Quarterly Banking Summary by Artefact Group
Commencing in the fourth division of 2017, the Aggregation transferred the Imaging Artefact Division, ahead appear in Others, into the Analog and MEMS Accumulation (AMG) to actualize the new alignment Analog, MEMS and Sensors Accumulation (AMS) led by Benedetto Vigna.
(a) Reflects the alteration of the Imaging Artefact Division, ahead appear in Others, to AMS as of the fourth division of 2017, the Aggregation has reclassified prior-period revenues.(b) Net revenues of “Others” includes revenues from sales of Subsystems, accumulation services, and added revenue.
Fourth Division Review
Fourth division net revenues added 15.5% sequentially, a bigger than melancholia performance, and 200 base credibility aloft the high-end of the Company’s advice ambit mainly due to college than accepted revenues in Imaging articles and Microcontrollers. On a consecutive basis, Analog, MEMS and Sensors Accumulation (AMS) revenues added 37.4% led by the Imaging Artefact Division which registered, as expected, triple-digit consecutive growth. Automotive and Discrete Accumulation (ADG) revenues were up 5.9% and Microcontrollers and Digital ICs Accumulation (MDG) revenues added 5.6%.
On a year-over-year basis, fourth division net revenues added by 32.6% on double-digit advance above all artefact groups with able absorption of new products. Analog, MEMS and Sensors Accumulation (AMS) fourth division revenues grew 70.1% year-over-year due to triple-digit advance in Imaging, a aciculate accretion in Analog and solid advance in MEMS. Microcontrollers and Digital ICs Accumulation (MDG) fourth division revenues grew 21.4% year-over-year on absolute able advance for accepted purpose microcontrollers, in allotment account by lower sales of businesses adeptness phase-out. Automotive and Discrete Accumulation (ADG) fourth division revenues added 14.6% compared to the year-ago division on able after-effects for both Automotive and Adeptness Discrete.
By arena of shipment, revenues grew on a consecutive base above all regions. Specifically, Asia Pacific revenues grew by 24.5%, EMEA added by 2.2% and the Americas was up by 0.4%. On a year-over-year basis, Asia Pacific revenues were up by 43.1%, EMEA added by 21.5% and the Americas grew by 8.0%.
Fourth division gross accumulation was $1.00 billion and gross allowance was 40.6%. On a consecutive basis, gross allowance added 110 base credibility due to bigger artefact mix and added accomplishment efficiency, partially account mainly by accustomed bulk burden and abrogating bill effects, net of hedging. Gross allowance added 310 base credibility year-over-year abundantly apprenticed by bigger accomplishment adeptness and bigger artefact mix partially account mainly by accustomed bulk burden as able-bodied as abrogating bill effects, net of hedging.
Combined R&D and SG&A costs were $592 actor compared to $558 actor and $570 actor in the above-mentioned and year-ago quarter, respectively, accretion mainly due to seasonality and inflationary dynamics.
Fourth division added assets and expenses, net, registered assets of $18 actor compared to $5 actor in the above-mentioned division due to college than advancing R&D funding.
Impairment and restructuring accuse in the fourth division were $20 actor compared to $14 actor and $24 actor in the above-mentioned and year-ago quarter, respectively, mainly accompanying to the set-top box restructuring plan appear in January 2016.
Operating assets in the fourth division rose acutely on a consecutive and year-over-year base to $408 actor compared to $278 actor and $129 actor in the above-mentioned division and year-ago quarter, respectively. By artefact group, MDG operating allowance added to 19.6% from 17.9% in the above-mentioned quarter. ADG operating allowance bigger to 12.3% compared to 10.9% in the above-mentioned quarter. AMS operating allowance broadcast to 20.9% from 13.2% in the above-mentioned quarter, benefiting from an bigger artefact mix, as able-bodied as leveraging college revenues and bigger accomplishment performance.
Fourth division operating assets afore crime and restructuring charges(1) added sequentially by $136 actor to $428 million, agnate to 17.3% of net revenues, apprenticed by a college akin of revenues and bigger gross allowance and resulted in a acknowledgment on invested basic of 35.7%. On a year-over-year basis, operating assets afore crime and restructuring charges(1) added by $275 actor absorption college revenues, accomplishment efficiencies and bigger artefact mix.
In the fourth division of 2017, the Aggregation recorded a one-time, non-cash allegation of $46 actor as a aftereffect of the afresh allowable Tax Cuts and Jobs Act (TCJA) in the United States. This allegation after-effects from the revaluation of the Company’s deferred tax assets as of December 31, 2017.
Fourth division net assets added decidedly both on a consecutive and year-over-year base to $308 million, or $0.34 adulterated antithesis per share, compared to net assets of $236 million, or $0.26 adulterated antithesis per share, in the above-mentioned division and net assets of $112 million, or $0.13 adulterated antithesis per share, in the year-ago quarter.
(1)Non-U.S. GAAP measure. See Appendix for added advice and adaptation to U.S. GAAP.
Full Year 2017 Review
Net revenues for the abounding year 2017 added 19.7% to $8.35 billion from $6.97 billion in 2016. By artefact group, abounding year 2017 Analog, MEMS and Sensors Accumulation (AMS) revenues were up 41.4%, on triple-digit advance in Imaging and able advance in both Analog and MEMS. Microcontrollers and Digital ICs Accumulation (MDG) revenues added 15.8% compared to 2016 on able advance in accepted purpose microcontrollers partially account by lower revenues for articles adeptness phase-out. Automotive and Discrete Accumulation (ADG) revenues added 8.8% for the abounding year of 2017 compared to the abounding year of 2016 on advance in both Automotive and Discrete.
Full year 2017 gross accumulation was $3.27 billion. Gross allowance bigger by 400 base credibility to 39.2% from 35.2% in abounding year 2016. Specifically, the 2017 gross allowance benefited from accomplishment efficiencies, bigger artefact mix, and bigger fab loading partially account by accustomed bulk pressure.
Combined R&D and SG&A costs added 1.7% to $2.29 billion in 2017 compared to $2.25 billion in 2016.
Other assets and expenses, net, registered assets of $55 actor in 2017 compared to $99 actor in 2016 mainly due to a lower akin of R&D grants.
In 2017, crime and restructuring accuse were $45 actor compared to $93 actor in 2016, mostly accompanying to the set-top box restructuring plan.
Operating assets in 2017 bigger by $779 actor to $993 actor compared to 2016.
Full year 2017 operating assets and operating allowance afore crime and restructuring charges(1) added acutely to $1.04 billion, agnate to 12.4% of net revenues, compared to $307 million, agnate to 4.4% of net revenues in 2016, on college revenues, gross allowance amplification and able operating leverage.
Income tax bulk in 2017 was $143 million, including the ancient appulse accompanying to tax ameliorate in the United States, absorption an able tax bulk of 15.0%.
Full year 2017 net assets was $802 million, or $0.89 absolutely adulterated antithesis per share, compared to net assets of $165 million, or $0.19 absolutely adulterated antithesis per allotment for the abounding year 2016.
(1)Non-U.S. GAAP measure. See Appendix for added advice and adaptation to U.S. GAAP.
Cash Breeze and Antithesis Area Highlights
Reflecting the able advance in revenues and advance in operating profitability, net banknote from operating activities was $587 actor and $1.71 billion for the fourth division and abounding year 2017, respectively. Abounding Year 2016 net banknote from operating activities was $1.04 billion.
Capital bulk payments, net of gain from sales, were $407 actor and $1.30 billion during the fourth division and abounding year of 2017, respectively. Abounding year 2016 basic expenditures, net of gain from sales, were $607 million.
Free banknote flow(1) was $145 actor and $338 actor during the fourth division and abounding year of 2017, respectively, agreeably impacted by bigger operating after-effects and college than accepted revenues in the fourth quarter. Abounding year 2016 chargeless banknote breeze was $316 million.
Inventory was $1.33 billion at December 31, 2017. Inventory in the fourth division of 2017 was at 4.4 turns or 82 canicule compared to 3.9 turns or 92 canicule in the third quarter.
The Aggregation paid banknote assets to shareholders of $54 actor and $214 actor for the fourth division and abounding year 2017, respectively. In addition, the Aggregation launched and completed over the advance of 2017, a allotment buy-back affairs of 18.6 actor shares for an accumulated bulk of $297 million.
ST’s net banking position(1) was $489 actor at December 31, 2017 compared to $446 actor at September 30, 2017. At December 31, 2017, ST’s absolute banking assets were $2.19 billion; absolute banking debt was $1.70 billion; and absolute equity, including non-controlling interest, was $5.47 billion.
In 2017, ST issued a $1.5 billion dual-tranche alms at 0% of new chief apart convertible bonds due 2022 and 2024. The proceeds, net of the bulk of the allotment buyback, were partially acclimated to aboriginal redeem, via net allotment settlement, both the 2019 and the 2021 convertible bonds issued in 2014 for a absolute of $1 billion and 26.8 actor shares from Treasury stock. As of the end of the year, the Aggregation has decidedly bargain its all-embracing banknote bulk of debt to 0.44%.
(1)Non-U.S. GAAP measure. See Appendix for added advice and adaptation to U.S. GAAP.
First Division 2018 Business Outlook
Mr. Bozotti commented, “We exited 2017 with absolute able acquirement growth, and cogent advance in our operating advantage and net income. In 2018, our cold is to advantage our achievements to abide to drive acceptable and assisting advance acknowledgment to our artefact leadership.
“We abide to see solid appeal above artefact groups and geographies and in the aboriginal division we ahead a bigger than melancholia trend for Acute Active and Internet of Things applications, and the abortive melancholia dynamics for smartphone applications. Based aloft that, as able-bodied as our abundant stronger than accepted acquirement advance in the antecedent quarter, we ahead aboriginal division revenues to abatement by about 10% on a consecutive basis, apery year-over-year advance of about 22% at the antithesis of our advice range. We apprehend the gross allowance to abatement to about 39.5% at the mid-point.
“In adjustment to abutment our advancing artefact portfolio mix and to ammunition able acquirement advance in the additional bisected of 2018 compared to the aboriginal half, we apprehend to advance this year about $1.0 to $1.1 billion.”
The Aggregation expects aboriginal division 2018 revenues to abatement about 10% on a consecutive basis, additional or bare 3.5 allotment points. Gross allowance in the aboriginal division is accepted to be about 39.5% additional or bare 2.0 allotment points.
This angle is based on an affected able bill barter bulk of about $1.18 = €1.00 for the 2018 aboriginal division and includes the appulse of absolute ambiguity contracts. The aboriginal division will aing on March 31, 2018.
Recent Corporate Developments
Q4 2017 – Artefact and Technology Highlights
Automotive and Discrete Accumulation (ADG)
Analog, MEMS and Sensors Accumulation (AMS)
Microcontrollers and Digital ICs Accumulation (MDG)
Use of Added Non-U.S. GAAP Banking Information
This columnist absolution contains added non-U.S. GAAP banking information, including operating assets (loss) afore crime and restructuring charges, operating allowance afore crime and restructuring charges, adapted net antithesis per share, chargeless banknote breeze and net banking position.
Readers are cautioned that these measures are unaudited and not able in accordance with U.S. GAAP and should not be advised as a acting for U.S. GAAP banking measures. In addition, such non-U.S. GAAP banking measures may not be commensurable to analogously blue-blooded advice from added companies.
See the Appendix of this columnist absolution for a adaptation of the Company’s non-U.S. GAAP banking measures to their agnate U.S. GAAP banking measures. To atone for these limitations, the added non-U.S. GAAP banking advice should not be apprehend in isolation, but alone in affiliation with the Company’s circumscribed banking statements able in accordance with U.S. GAAP.
Some of the statements independent in this absolution that are not absolute facts are statements of approaching expectations and added advanced statements (within the acceptation of Section 27A of the Antithesis Act of 1933 or Section 21E of the Antithesis Barter Act of 1934, anniversary as amended) that are based on management’s accepted angle and assumptions, and are conditioned aloft and additionally absorb accepted and alien risks and uncertainties that could account absolute results, performance, or contest to alter materially from those advancing by such statements, due to, amid added factors:
Such advanced statements are accountable to assorted risks and uncertainties, which may account absolute after-effects and achievement of our business to alter materially and abnormally from the advanced statements. Assertive advanced statements can be articular by the use of advanced attractive terminology, such as “believes,” “expects,” “may,” “are accepted to,” “should,” “would be,” “seeks” or “anticipates” or agnate expressions or the abrogating thereof or added variations thereof or commensurable terminology, or by discussions of strategy, affairs or intentions.
Some of these accident factors are set alternating and are discussed in added detail in “Item 3. Key Advice – Accident Factors” included in our Annual Report on Form 20-F for the year concluded December 31, 2016, as filed with the SEC on March 3, 2017. Should one or added of these risks or uncertainties materialize, or should basal assumptions prove incorrect, absolute after-effects may alter materially from those declared in this absolution as anticipated, believed, or expected. We do not intend, and do not accept any obligation, to amend any industry advice or advanced statements set alternating in this absolution to reflect consecutive contest or circumstances.
STMicroelectronics Appointment Alarm and Webcast Information
The administration of STMicroelectronics will conduct a alive webcast of its appointment alarm on January 25, 2018 at 9:30 a.m. Central European Time (CET) / 3:30 a.m. U.S. Eastern Time (ET) / 12:30 a.m. U.S. Pacific Time (PT), to altercate achievement for the fourth division and abounding year of 2017.The alive webcast of the appointment alarm will be accessible by accessing http://investors.st.com. Those accessing the webcast should go to the Web armpit at atomic 15 account above-mentioned to the call, in adjustment to register, download and install any all-important audio software. The webcast will be accessible until February 9, 2018.
About STMicroelectronicsST is a all-around semiconductor baton carrying able and energy-efficient articles and solutions that adeptness the electronics at the affection of accustomed life. ST’s articles are begin everywhere today, and calm with our customers, we are enabling smarter active and smarter factories, cities and homes, alternating with the aing bearing of adaptable and Internet of Things devices.
By accepting added from technology to get added from life, ST stands for life.augmented.
In 2017, the Company’s net revenues were $8.35 billion, confined added than 100,000 barter worldwide.
Further advice can be begin at www.st.com.
For added information, amuse contact:
INVESTOR RELATIONS:Tait Sorensen Accumulation VP, Broker RelationsSTMicroelectronicsTel: 1 602 485 [email protected]
MEDIA RELATIONS:Alexis Breton Director, PR & Media OperationsSTMicroelectronicsTel: 33 6 59 16 79 [email protected]
AppendixSTMicroelectronicsSupplemental Banking Information
ST aligns its artefact families into three artefact groups to bigger advantage the artefact synergies about its cardinal focus on Acute Active and Internet of Things applications: Automotive and Discrete Accumulation (ADG); Analog and MEMS Accumulation (AMG); and Microcontrollers and Digital ICs Accumulation (MDG). Commencing in the fourth division of 2017, the Aggregation transferred the Imaging Artefact Division, ahead appear in Others, into the Analog and MEMS Accumulation (AMG) to actualize the new alignment Analog, MEMS and Sensors Accumulation (AMS).
(a) Reflects the alteration of the Imaging Artefact Division, ahead appear in Others, to AMS as of the fourth division of 2017, the Aggregation has reclassified prior-period revenues.(b) Net revenues of “Others” includes revenues from sales of Subsystems, accumulation services, and added revenue. Operating assets (loss) of “Others” includes items such as bare accommodation charges, impairment, restructuring accuse and added accompanying cease costs, appearance out and start-up costs, and added unallocated costs such as: cardinal or appropriate assay and development programs, assertive corporate-level operating expenses, apparent claims and litigations, and added costs that are not allocated to artefact groups, as able-bodied as operating antithesis of Subsystems and added products. “Others” includes:
(Appendix – continued)STMicroelectronicsSupplemental Non-U.S. GAAP Banking InformationU. S. GAAP – Non-U.S. GAAP ReconciliationIn Actor US$ Except Per Allotment Data
The added non-U.S. GAAP advice presented in this columnist absolution is unaudited and accountable to inherent limitations. Such non-U.S. GAAP advice is not based on any absolute set of accounting rules or attempt and should not be advised as a acting for U.S. GAAP measurements. Also, our added non-U.S. GAAP banking advice may not be commensurable to analogously blue-blooded non-U.S. GAAP measures acclimated by added companies. Further, specific limitations for alone non-U.S. GAAP measures, and the affidavit for presenting non-U.S. GAAP banking information, are set alternating in the paragraphs below. To atone for these limitations, the added non-U.S. GAAP banking advice should not be apprehend in isolation, but alone in affiliation with our circumscribed banking statements able in accordance with U.S. GAAP.
Operating assets (loss) afore crime and restructuring accuse and ancient items is acclimated by administration to advice enhance an compassionate of advancing operations and to acquaint the appulse of the afar items, such as impairment, restructuring accuse and added accompanying cease costs. Adapted net antithesis and antithesis per allotment (EPS) are acclimated by administration to advice enhance an compassionate of advancing operations and to acquaint the appulse of the afar items like impairment, restructuring accuse and added accompanying cease costs attributable to ST and added ancient items, net of the accordant tax impact.
The Aggregation believes that these non-GAAP banking measures accommodate advantageous advice for investors and administration because they admeasurement the Company’s accommodation to accomplish profits from its business operations, excluding the aftereffect of acquisitions and costs accompanying to the acumen of its activities and sites that it does not accede to be allotment of its on-going operating results, thereby offering, back apprehend in affiliation with the Company’s GAAP financials, (i) the adeptness to accomplish added allusive period-to-period comparisons of the Company’s on-going operating results, (ii) the adeptness to bigger analyze trends in the Company’s business and accomplish accompanying trend analysis, and (iii) an easier way to analyze the Company’s after-effects of operations adjoin broker and analyst banking models and valuations, which usually exclude these items.
(US$ millions, except per allotment abstracts ($))
(US$ million, except per allotment abstracts ($))
(US$ millions, except per allotment abstracts ($))
(Appendix – continued)
Net banking position: assets (debt), represents the antithesis amid our absolute banking assets and our absolute banking debt. Our absolute banking assets accommodate banknote and banknote equivalents, bankable securities, concise deposits and belted cash, and our absolute banking debt includes concise borrowings, accepted allocation of abiding debt and abiding debt, all as appear in our circumscribed antithesis sheet. We accept our net banking position provides advantageous advice for investors and administration because it gives affirmation of our all-around position either in agreement of net acknowledgment or net banknote position by barometer our basic assets based on cash, banknote equivalents and bankable antithesis and the absolute akin of our banking indebtedness. Net banking position is not a U.S. GAAP measure.
Free banknote breeze is authentic as net banknote from operating activities bare net banknote from (used in) advance activities, excluding acquittal for purchases (proceeds from the auction of) bankable securities, concise deposits and belted cash. We accept chargeless banknote breeze provides advantageous advice for investors and administration because it measures our accommodation to accomplish banknote from our operating and advance activities to sustain our operating activities. Chargeless banknote breeze is not a U.S. GAAP admeasurement and does not represent absolute banknote breeze back it does not accommodate the banknote flows generated by or acclimated in costs activities. In addition, our analogue of chargeless banknote breeze may alter from definitions acclimated by added companies.
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