STMicroelectronics N.V. (STM) Misses Q4 EPS by 1c; Plans Workforce Reduction

STMicroelectronics N.V. (NYSE: STM) reported Q4 EPS of $0.00, $0.01 worse than the analyst estimate of $0.01. Revenue for the quarter came in at $1.67 billion versus the consensus estimate of $1.66 billion.

After an extensive review of external and internal options for the future of the Company's set-top box business, ST will discontinue the development of new platforms and standard products for set-top-box and home gateway. The slower than expected market adoption of leading-edge products and increasing competition on low-end boxes, combined with the required high level of R&D investment, has led this business to generate significant losses in the course of the last years.

As a result of this, the Company announced a global workforce review, including:

• the redeployment of about 600 employees, currently associated with the set-top-box business, to support principally ST's growth ambitions in digital automotive and microcontrollers;
• a global workforce re-alignment that may affect approximately 1,400 employees worldwide, of which about 430 in France through a voluntary departure plan, about 670 in Asia and about 120 in the US. Deployment of the plan by country or site will be subject to applicable legislation and will depend on local negotiations. In 2016, the workforce re-alignment is anticipated to affect about 1,000 employees, out of which about 150 in France.

Annualized savings are estimated at $170 million upon completion and restructuring costs at about $170 million.

For earnings history and earnings-related data on STMicroelectronics N.V. (STM) click here.

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