This was reflected in the company's first quarter financial results in which the company made a net loss of $41 million on revenues of $1.61 billion. The quarterly sales were down 5.4 percent year-on-year. Despite rumors that Carlo Bozotti's tenure as CEO of ST could soon come to and end the executive declined to discuss this in a conference call with analysts set up on the topic of the financial results.
For several years ST suffered losses as it struggled to disentangle itself from the failed mobile phone chip joint venture ST-Ericsson. During that time the analog and MEMS business unit was spark of hope for ST as it achieved design wins for inertial sensors in smartphones and enjoyed the booming market. In recent quarters however, its MEMS business has been in decline as ST lost some of those design slots and MEMS in consumer applications has became increasingly commoditized and pricing was eroded. At the same time the last couple of quarters have seen softness in a smartphone market that seems to have largely satuarated its market.
In 1Q16 ST re-organized its business into three product business units to address a strategic focus on smart driving and the Internet of Things: the Automotive and Discrete Group (ADG); Analog and MEMS Group (AMG) and Microcontrollers and Digital ICs Group (MDG). Revenues within the ADG and MDG were essentially flat year-on-year while the AMG showed a year-on-year decline in revenue of 17.1 percent to $369 million.
"Following a few quarters of market softness, during the first quarter we started to see signs of a recovery in the industry, with bookings improving across all regions and particularly in automotive and industrial," said Carlo Bozotti, CEO of ST, in a statement.
The company said it expects 2Q16 revenues to increase sequentially by about 5.5 percent plus or minus 3.5 percentage points.
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