STMicro shares rise on bright outlook

European chip maker STMicroelectronics, hit by costs from a spin-off and an acquisition, reported a loss for the first quarter and fell short of Wall Street's expectations, but its shares rose on its optimistic outlook, an Associated Press report said.

The stock traded up 4.5% on the Paris stock exchange this week, the report said.

The company issued a statement saying it lost €54 million (US$84 million) during the first three months of the year compared with a profit of €47 million (US$74 million) during the same period in 2007.

Excluding restructuring and impairment charges and other items, CEO Carlo Bozotti was quoted as saying that company predicts growth 'much stronger' than 4% to 6%.

Orders in the current quarter are 'very strong' and there are 'initial good signs' for the third quarter, Bozotti said.

He shrugged off concerns about the wireless chip market after disappointing results for mobile phone makers, some of STMicro's major customers, but admitted the declining US dollar was a concern because the company generates most of its revenue in that currency, the report added.

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