Shares in chipmaker STMicro dip

21st October 2004, Comments 0 comments

PARIS, Oct 21 (AFP) - Shares in STMicroelectronics slipped on Thursday after the French-Italian semiconductor manufacturer issued a warning about its fourth-quarter sales and margins outlook.

PARIS, Oct 21 (AFP) - Shares in STMicroelectronics slipped on Thursday after the French-Italian semiconductor manufacturer issued a warning about its fourth-quarter sales and margins outlook.

In early afternoon trading, STMicro shares were down EUR 0.08 or 0.57 percent to EUR 13.90, while the CAC-40 index of leading French shares was down 7.94 points or 0.22 percent at 3,657.74.

STMicro shares came under downward pressure after the company late Wednesday said gross margins would stand at 38-39 percent in the fourth quarter, down from previous forecast of a 40 percent gross margin.

The company also forecast sales in the fourth quarter to be up zero to five from the third quarter, which was also below expectations.

Further weighing on the shares was the company's cautious forecast on the global semiconductor market, dealers said.

STMicroelectronics chief executive Pasquale Pistorio said the company no longer expected the global semiconductor market to grow 14 percent next year in light of sharp declines in client demand seen in the third quarter.

CSFB analysts said in a note to clients: "Fourth quarter guidance looks weak.

Company revenue guidance is far from the typical seasonal bounce and suggests downside to our expectation".

"Even more disappointing is the 38-39 percent gross margin guidance," they added.

STMicro said late Wednesday that it swung to a profit in the third quarter as sales grew 24 percent, but the world's sixth-largest chipmaker added that fourth quarter sales would be below forecasts because of weaker demand for its products.

The Geneva-based company reported net income of USD 189 million (EUR 150 million), or 20 cents a share, on sales of USD 2.23 billion for the quarter ending September 25. During the same quarter last year, the chipmaker lost 50 million dollars, or six cents a share, on sales of USD 1.8 billion.

Analysts had expected earnings of 17 cents a share and sales of USD 2.23 billion.

© AFP

Subject: French News

0 Comments To This Article