Combined SG&A and R&D expenses decreased 6% to $852 million compared to $909 million in the prior quarter due to positive seasonal and currency effects and ST-Ericsson's ongoing cost-realignment initiatives. Combined operating expenses as a percentage of sales, improved to 39.3% in the 2012 third quarter compared to 42.3% in the prior quarter.
Restructuring and impairment charges significantly increased to $713 million compared to $56 million in the prior quarter, mainly due to the non-cash impairment charge of Wireless goodwill.
Reflecting losses at ST-Ericsson, operating margin before impairment, restructuring and one-time items attributable to ST improved to 0.3% in the 2012 third quarter compared to negative 1.3% in the prior quarter.*
In the third quarter of 2012, net loss attributable to non-controlling interests was $351 million, which mainly included the 50% owned by Ericsson in the ST-Ericsson joint venture, as consolidated by ST. In the second quarter of 2012, the corresponding amount was $160 million.
Third quarter net loss attributable to parent company was $478 million or $(0.54) per share, compared to a net loss of $(0.08) per share and diluted earnings of $0.08 per share in the prior and year-ago quarters, respectively. On an adjusted basis, net of related taxes, ST reported a non-U.S. GAAP net loss per share of $(0.03), excluding impairment, restructuring charges and one-time items in the third quarter, compared to a net loss of $(0.05) per share and diluted earnings of $0.09 per share in the prior and year-ago quarters, respectively.*
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(*)Operating income before impairment, restructuring and one-time items, operating margin before impairment, restructuring and one-time items, operating margin before impairment, restructuring and one-time items attributable to ST and adjusted net earnings per share are non-U.S. GAAP measures. For additional information and reconciliation to U.S. GAAP, please refer to Attachment A.
For the third quarter of 2012, the effective average exchange rate for the Company was approximately $1.29 to EUR 1.00 compared to $1.32 to EUR 1.00 for the second quarter of 2012 and $1.40 to EUR 1.00 for the third quarter of 2011.
Net Revenues by Market Segment / Channel
---------------------------------------------------------------------------- Net Revenues By Market Segment / Channel Q3 2012 Q2 2012 Q3 2011 (*)(Estimated and In %) ---------------------------------------------------------------------------- Market Segment / Channel: ---------------------------------------------------------------------------- Automotive 18% 19% 17% ---------------------------------------------------------------------------- Computer 13% 13% 14% ---------------------------------------------------------------------------- Consumer 11% 10% 10% ---------------------------------------------------------------------------- Industrial & Other 9% 9% 9% ---------------------------------------------------------------------------- Telecom 25% 27% 28% ---------------------------------------------------------------------------- Total OEM 76% 78% 78% ---------------------------------------------------------------------------- Distribution 24% 22% 22% ----------------------------------------------------------------------------
(*) Sales recorded by ST-Ericsson and consolidated by ST are included in Telecom and Distribution.
On a sequential basis, Computer, Consumer and Industrial & Other grew 3%, 1% and 1%, respectively, while Automotive and Telecom decreased 3% and 8%, respectively. Distribution increased 6%.
Revenues and Operating Results by ST Product Segment
Commencing January 1, 2012, the Company began reporting the former ACCI Product Segment (Automotive/Consumer/Computer/Communication Infrastructure) into the other segments. The new product segments are Automotive Segment ("APG") and Digital Sector ("Digital") comprised of the Digital Convergence Group ("DCG") and Imaging, BiCMOS ASIC and Silicon Photonics Group ("IBP").
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Operating Segment Q3 2012 Q3 2012 Q2 2012 Q2 2012 Q3 2011 Q3 2011
(In Million US$) Net Operating Net Operating Net Operating
Revenues Income Revenues Income Revenues Income
(Loss) (Loss) (Loss)
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Automotive (APG) 391 34 404 38 404 46
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Analog, MEMS &
Microcontrollers
(AMM) 804 101 774 98 856 147
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Digital 325 (30) 353 (36) 442 20
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Power Discrete
(PDP) 275 18 262 4 316 33
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Wireless (a) 359 (184) 344 (240) 412 (215)
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Others (b)(c) 12 (731) 11 (71) 12 (54)
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TOTAL 2,166 (792) 2,148 (207) 2,442 (23)
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