News Article
STMicro Q4 gross margins hit by currency fluctuations
European semiconductor giant STMicroelectronics has lowered its expectations for fourth quarter (ending December 31 2004) gross margins to 36.6% from its previous guidance of 38% to 39%.
European semiconductor giant STMicroelectronics has lowered its expectations for fourth quarter (ending December 31 2004) gross margins to 36.6% from its previous guidance of 38% to 39%.
Net revenues during the quarter however are forecast to grow by 4.3% - at the higher end of the previously announced guidance range of between flat and 5% - to US$ 2.3 billion.
The company blamed the poorer than expected gross margin forecast on currency fluctuations, pricing pressure and unexpectedly low manufacturing utilisation and performances at certain fabs.
"The major contributor to the gross margin variance from the earlier guidance was the weakening of the US dollar," said an STMicro spokesman, pointing out that earlier guidance was based on an average euro to US dollar exchange rate of $1.23 while the actual rate during the quarter was around $1.27.
The company has also announced that it believes that sales, general and administrative (SG&A) and research and development expenses would, as a percentage of sales, will be flat compared with the 2004 third quarter despite the adverse currency impact.
STMicro will report its full fourth quarter and full year 2004 earnings results on January 26, 2005.
Net revenues during the quarter however are forecast to grow by 4.3% - at the higher end of the previously announced guidance range of between flat and 5% - to US$ 2.3 billion.
The company blamed the poorer than expected gross margin forecast on currency fluctuations, pricing pressure and unexpectedly low manufacturing utilisation and performances at certain fabs.
"The major contributor to the gross margin variance from the earlier guidance was the weakening of the US dollar," said an STMicro spokesman, pointing out that earlier guidance was based on an average euro to US dollar exchange rate of $1.23 while the actual rate during the quarter was around $1.27.
The company has also announced that it believes that sales, general and administrative (SG&A) and research and development expenses would, as a percentage of sales, will be flat compared with the 2004 third quarter despite the adverse currency impact.
STMicro will report its full fourth quarter and full year 2004 earnings results on January 26, 2005.
