ST-Ericsson blames a restructuring program for a higher-than-expected fall in sales that led to its losses growing $24 million (€16.3 million) during 1Q11.
The ST Microelectronics and Ericsson joint venture generated a loss of $178 million during the period as sales of new equipment failed to take up the slack of lower shipments of legacy kit. When combined with a regular seasonal sales dip, the result was a $162 million drop in revenues year-on-year to $444 million.
President and chief Gilles Delfassy acknowledged sales fell short of the firm’s forecasts for the quarter, but drew some comfort from the fact that new products, including a high-speed modem, continued to contribute more to overall revenues.
“In the midst of these financial results, our main focus remains on improving efficiency and securing the successful execution and delivery of our new products,” he explained.
However the turnaround isn’t on the horizon. The firm predicts a further fall in sales due to the disparity between old and new products in the second quarter.