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July 26, 2011, 4:00 AM EDT
By Chiara Remondini
July 26 (Bloomberg) -- STMicroelectronics NV fell the most in two years in Paris trading after Chief Executive Officer Carlo Bozotti said there will be a “correction” in the company’s third-quarter sales due to difficulties at customer Nokia Oyj.
STMicro, Europe’s largest semiconductor maker, expects “some glitches at our major wireless customer,” Chief Executive Officer Carlo Bozotti said in a Bloomberg Television interview today. Nokia, the Finnish mobile-phone maker that’s ceding market share to Apple Inc., is STMicro’s top client.
The CEO said he expects a “significant reduction in the demand outlook from a major customer compared to previous expectations,” without being more specific.
The shares declined as much as 9.3 percent, their biggest drop since 2009, and traded at 5.94 euros, down 7.1 percent, at 9:34 a.m.
Nokia, the world’s largest maker of mobile phones, on July 21 reported its first quarterly loss since 2009 after handset sales slumped following an accord to shift to Microsoft Corp. software.
Exane BNP Paribas downgraded STMicro to “underperform” from “neutral” today. Analyst Jerome Ramel cited the “ugly” third-quarter guidance and the “collapse” in the gross margin for the cut.
“Certainly Nokia has had a major impact on the outlook,” said Saverio Papagno, an analyst at AZ Fund Management in Luxembourg.
ST-Ericsson, the semiconductor joint venture between Ericsson AB and STMicro, said July 20 that its second-quarter net loss widened to $221 million from a year earlier as sales fell. ST-Ericsson, whose clients include Nokia and Samsung Electronics Co., expects net sales “to be about flat sequentially,” in the third quarter.
ST-Ericsson last month announced cost cuts aimed at saving $120 million a year and pushed back the date at which it expects to become profitable. The cuts will “affect up to 500 employees worldwide,” the company said.
--With assistance from Owen Thomas in London. Editors: Jerrold Colten, Kenneth Wong
To contact the reporter on this story: Chiara Remondini in Milan at cremondini@bloomberg.net
To contact the editor responsible for this story: Kenneth Wong at kwong11@bloomberg.net
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July 26 (Bloomberg) -- STMicroelectronics NV fell the most in two years in Paris trading after Chief Executive Officer Carlo Bozotti said there will be a “correction” in the company’s third-quarter sales due to difficulties at customer Nokia Oyj.
STMicro, Europe’s largest semiconductor maker, expects “some glitches at our major wireless customer,” Chief Executive Officer Carlo Bozotti said in a Bloomberg Television interview today. Nokia, the Finnish mobile-phone maker that’s ceding market share to Apple Inc., is STMicro’s top client.
The CEO said he expects a “significant reduction in the demand outlook from a major customer compared to previous expectations,” without being more specific.
The shares declined as much as 9.3 percent, their biggest drop since 2009, and traded at 5.94 euros, down 7.1 percent, at 9:34 a.m.
Nokia, the world’s largest maker of mobile phones, on July 21 reported its first quarterly loss since 2009 after handset sales slumped following an accord to shift to Microsoft Corp. software.
Exane BNP Paribas downgraded STMicro to “underperform” from “neutral” today. Analyst Jerome Ramel cited the “ugly” third-quarter guidance and the “collapse” in the gross margin for the cut.
“Certainly Nokia has had a major impact on the outlook,” said Saverio Papagno, an analyst at AZ Fund Management in Luxembourg.
ST-Ericsson, the semiconductor joint venture between Ericsson AB and STMicro, said July 20 that its second-quarter net loss widened to $221 million from a year earlier as sales fell. ST-Ericsson, whose clients include Nokia and Samsung Electronics Co., expects net sales “to be about flat sequentially,” in the third quarter.
ST-Ericsson last month announced cost cuts aimed at saving $120 million a year and pushed back the date at which it expects to become profitable. The cuts will “affect up to 500 employees worldwide,” the company said.
--With assistance from Owen Thomas in London. Editors: Jerrold Colten, Kenneth Wong
To contact the reporter on this story: Chiara Remondini in Milan at cremondini@bloomberg.net
To contact the editor responsible for this story: Kenneth Wong at kwong11@bloomberg.net
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