(BN) France Said to Clash With STMicroelectronics Over Jobs, Strategy

France Said to Clash With STMicroelectronics Over Jobs, Strategy
2015-07-31 13:41:17.182 GMT


By Marie Mawad, Francois de Beaupuy and Helene Fouquet
(Bloomberg) -- STMicroelectronics NV and its French state
owner are headed for collision over a strategy that includes
possible job cuts at Europe’s biggest semiconductor maker,
according to people familiar with the matter.
Chief Executive Officer Carlo Bozotti’s turnaround plan for
the digital unit, which makes chips used in set-top boxes and
smartphone sensors, entails cutting hundreds of positions in
France and elsewhere out of a workforce of about 2,500, the
people said, asking not to be identified discussing private
deliberations. France and Italy’s governments together own 27.5
percent of Geneva-based STMicro.
The proposal is drawing criticism from the French
government, which questions Bozotti’s research and development
decisions and how he allocated hundreds of millions of euros in
state and European Union subsidies, the people said.
The French stakeholder is also disappointed by some past
technology choices and timing of product launches, and its trust
in management has been damaged after the company made overly
optimistic presentations about its business in recent months,
said one of the people with knowledge of the situation.
The simmering tension between what was once one of the
world’s largest chipmakers and its shareholder centers on CEO
Bozotti, a 62-year-old Italian who is in his 11th year leading
the company. Under Bozotti, STMicro accumulated about $1 billion
in net losses, partly because of wrong bets on chip customers
such as Nokia Oyj. Its 2014 revenue, at $7.3 billion, was 17
percent less than in 2005, the year he joined the company.

Volatile Demand

A STMicro spokesman declined to comment on its relationship
with shareholders and plans for the digital unit, and said
Bozotti wasn’t available for an interview. STMicro continues to
explore options for the business and expects an update in
October, Bozotti said on an earnings conference call on July 23.
Representatives for France’s Economy Ministry and Finance
Ministry didn’t return calls seeking comment.
The chipmaker’s supervisory board has one representative
from France and Italy each. Italy’s government remains
supportive of Bozotti and his management team and is focused on
a transfer of the STMicro shares from the finance ministry to
the Fondo Strategico Italiano, two people familiar with the
matter said.
While efforts to push its chips to carmakers and onto
wearable electronics have paid off, STMicro remains exposed to
products whose demand are more volatile, such as personal
computers and smartphones.
STMicro employed more than 43,000 people at the end of last
year. About 11,000 workers are in France and almost 10,000 in
Italy, according to unions. The digital business, which accounts
for about 15 percent of STMicro’s revenue, includes some
products inherited from a former venture with Ericsson AB. It
has factories in Crolles and Rousset in southeastern France.
STMicro union representatives have voiced concerns about
Bozotti’s decisions to quit some product developments in favor
of others. In a July 18 letter addressed to STMicro’s government
shareholders and the European Commission, Works Council
Secretary Henri Errico included a change in management on its
list of proposals for the chipmaker.
“During the past decade STMicroelectronics has fallen down
the industry’s rankings amid a finance-only focus that’s yielded
no result,” Errico wrote. “Employees denounce this unclear and
short-term strategy that’s led to business failures and
inefficient reorganizations.”

For Related News and Information:
Top Stories: TOP <GO>
BI on Semiconductor Industry: BI SEMC <GO>

--With assistance from Daniele Lepido in Milan.

To contact the reporters on this story:
Marie Mawad in Paris at +33-1-5530-6290 or
mmawad1@bloomberg.net;
Francois de Beaupuy in Paris at +33-1-5365-5051 or
fdebeaupuy@bloomberg.net;
Helene Fouquet in Paris at +33-1-5365-5038 or
hfouquet1@bloomberg.net
To contact the editors responsible for this story:
Kenneth Wong at +49-30-70010-6215 or
kwong11@bloomberg.net
Ville Heiskanen

(Makor- Oscar Gruss) AVOL- quick thoughts on valuation



From: LAURA ANREDER (OSCAR GRUSS & SON IN) At: Jul 31 2015 15:24:48
To: LAURENT CHEKROUN (MAKOR SECURITIES LO)
Subject: Fwd:AVOL- quick thoughts on valuation
AVOL - Aircraft leasing company (Ireland headquarters, Cayman Island corporation), 40% Asia/Pacific focus, 2.5 year fleet age, 49 customers in 28 countries, 73% single aisle aircraft. Air Lease (NYSE-AL), which is U.S.-based) trades at P/E multiple of 10.5x 2016E ($3.17 EPS), trading multiple implies ~$34/share for AVOL (note: AL 33% tax rate). Aircastle Ltd. (NYSE-AYR) (U.S. headquarters, Bermuda corporation) trades at ~10x P/E multiple ($2.29 EPS), tax rate <10%. Fly Leasing Ltd. (NYSE-FLY) (Ireland headquarters, Bermuda corporation) trades at 8.5x P/E multiple ($1.88 EPS, decline from 2015E $1.88 EPS). Last, AerCap Holdings NV (NYSE-AER) (Netherlands-based), an integrated/ diversified aircraft-related company with a $9.0B market cap, trades at 8.0x P/E multiple ($5.71 EPS) (note: ~15% tax rate). AER along with CIT Group Inc. (NYSE-CIT), which also has aircraft leasing operations, may have been the other party that made the $30/share for AVOL. DISCLAIMER

This information represents neither an offer to buy or sell any security nor, because it does not take into account the differing needs of individual clients, investment advice. Those seeking investment advice specific to their financial profiles and goals should contact their Oscar Gruss & Son Incorporated sales representative. Oscar Gruss & Son Incorporated believes this information to be reliable, but no representation is made as to accuracy or completeness. This information does not analyze every material fact concerning a company, industry, or security. Oscar Gruss & Son Incorporated assumes that this information will be read in conjunction with other publicly available data. Matters discussed here are subject to change without notice. There can be no assurance that reliance on the information contained here will produce profitable results. A security denominated in a foreign currency is subject to fluctuations in currency exchange rates, which may have an adverse effect on the value of the security upon the conversion into local currency of dividends, interest, or sales proceeds. The value of securities and depositary receipts of foreign issuers that are denominated in United States dollars are also influenced by fluctuations in currency exchange rates.

© 2015 Oscar Gruss & Son Incorporated. All rights reserved.

>>> US Gapping up

Gapping up
In reaction to strong earnings/guidance:JASN +28.9%, SKYW +18.3%, HTCH +15.2%, YRCW +15.2%, COLM +11.7%, ZLTQ +10.9%, NSU +9.3%, ATEN +8.7%, ELLI +8.6%, CVEO +8.2%, MGI +7.9%, EXPE +7.8%, SAND +7.8%, NLNK +7.6%, MXWL +7.1%, ( selected as exclusive capacitive energy storage supplier by subsidiary of China's largest rail company, CRRC Corp), IMMR +6.7%, NGVC +6.3%, FRGI +6.1%, PXLW +5.5%, RCL +4.5%, FIX +4.1%, ( increases quarterly dividend), TRP +4%, AXL +4%, MOH +3.7%, BCOR +3.4%, (Blucora's Infospace subsidiary signs deal to distribute Bing search results and advertising content through the Infospace network of Web search properties and partner websites on desktop and mobile), WETF +3.4%, HMC +3.2%, TNP +3.2%, ISNS +3.1%, TNDM +3.1%, PFS +3.1%, AMGN +2.7%, TPX +2.3%, (appoints Barry Hytinen as EVP and CFO, effective immediately ), WU +2.3%, UHS +1.8%, AUY +1.6%, CRAY +1.4%, STX +1.4%, CATM +1.2%, CALD +1.1%, DGI +1%, RGC +1%, NWL +0.9%

M&A news: CCE +8.3% (WSJ report on merger talks)

Other news: MXWL +17.6% (selected as exclusive capacitive energy storage supplier by subsidiary of China's largest rail company, CRRC Corp; co also reported earnings), BCOR +3.4% (signed a three-year search and advertising deal to distribute Bing results through the Infospace network; co also reported earnings), TNDM +3.1% (entered into a non-exclusive Development Agreements with Dexcom (DXCM), to integrate future generation Tandem insulin pumps with the Dexcom G5 and G6 products; co also reported earnings), ENH +2.7% to replace TMST in the S&P MidCap 400), JUNO +1.9% ( announces US FDA clearance of its INDA regarding JCAR015, to treat Adult Relapsed/Refractory Acute Lymphoblastic Leukemia ), IDI +1.4% (Mitchell P. Kopin disclosed 8.2% passive stake in 13G filing), EVAR +1.3% (Lombard Medical acquires Altura Medical), SALT +1.1% (10.31% stakeholder Monarch Alternative Capital issues letter to Board; believes co should resume its asset sale program and use the proceeds to buy back stock)

Analyst comments: GPRO +4.4% (upgraded to Buy from Neutral at Citigroup), AIXG +4% (upgraded to Outperform at Exane BNP Paribas), WU +2.3% (upgraded to Equal Weight from Underweight at Barclays), UA +0.7% (upgraded to Buy at Argus), ALV +0.6% (upgraded to Outperform from Neutral at Credit Suisse), CB +0.5% (upgraded to Outperform from Mkt Perform at Bernstein)

>>> US Gapping down

Gapping down
In reaction to disappointing earnings/guidance: OCLS -15.3%, SZYM -15%, CPSI -11.9%, OCN -11.6%, SYNA -11.1%, OUTR -10%, (appoints Erik Prusch as its Chief Executive Officer, effective July 31, 2015), INT -8.9%, QLGC -7.7%, TSYS -7.6%, FLR -7.5%, (announces agreement to divest 50% of its shares in Fluor S.A, to a leading multinational Spanish construction company for EUR 39 mln ), LNKD -6.7%, HBI -6.6%, COHR -6.4%, FEYE -4.9%, OMCL -4.5%, SQI -4.3%, CHEF -3.8%, GIL -3.8%, BCOV -3.7%, SAM -3.2%, RLGY -2.9%, MTD -2.8%, EA -2.4%, COHU -2.1%, MERC -1.9%, EGO -1.9%, KCG -1.8%, XOM -1.7%, TNAV -1.3%, AMCC -1.1%, WY -1.1%, BPL -1%

Select metals/mining stocks trading lower: FCX -2.3%, GOLD -1.5%, SLV -1.1%, GG -0.9%, GFI -0.8%, BHP -0.1%

Select oil/gas related names showing early weakness: FRO -2.8%, STO -2.7%, PBR -2.6%, SDRL -2.5%, BP -1.7%

Other news: RADA -32.4% (prices a public offering of 6,910,569 of its ordinary shares at$1.23/share), MILL -28% (NYSE to suspend trading immediately in Miller Energy Resources and commence delisting proceedings), RAS -6% (commences an underwritten public offering), Q -1.4% (launches a 7 mln share secondary offering of common stock, by stockholders that include Bain Capital Investors)

Analyst comments: Z -2.5% (downgraded to Underperform from Market Perform at Cowen), SSYS -1.4% (downgraded to Underperform from Neutral at BofA/Merrill; downgraded to Sell from Neutral at UBS), MDLZ -0.6% (downgraded to Neutral from Buy at Goldman)

>>> Royal Caribbean beats by $0.11, reports revs in-line; guides FY15 EPS above

Royal Caribbean beats by $0.11, reports revs in-line; guides FY15 EPS above consensus
Reports Q2 (Jun) earnings of $0.84 per share, excluding non-recurring items, $0.11 better than the Capital IQ Consensus Estimate of $0.73; revenues rose 3.9% year/year to $2.06 bln vs the $2.06 bln consensus. Co issues upside guidance for FY15, sees EPS of $4.65-4.75 (Prior $4.50-4.60), excluding non-recurring items, vs. $4.62 Capital IQ Consensus Estimate.
  • Net Yields are expected to increase in the range of 2.9% to 3.9% on a Constant-Currency basis (down 1.1% to 0.1% As-Reported).
  • NCC excluding fuel are expected to be better than flat on a Constant-Currency basis (down approximately 2.5% As-Reported), including some increased investment in marketing activities.

>>> Exxon Mobil misses by $0.11, misses on revs

Exxon Mobil misses by $0.11, misses on revs

Reports Q2 (Jun) earnings of $1.00 per share, $0.11 worse than the Capital IQ Consensus Estimate of $1.11; revenues fell 33.4% year/year to $74.11 bln vs the $75.22 bln consensus
  • Downstream and Chemical segment earnings increased significantly from the second quarter of 2014, driven by higher margins, continued strong demand, and the quality of the company's product and asset mix.
  • However, higher Downstream and Chemical earnings were more than offset by the impact of weaker Upstream realizations and lower asset management gains
  • On an oil-equivalent basis, production increased 3.6 percent from the second quarter of 2014. Liquids production totaled 2.3 mln barrels per day, up 243,000 barrels per day, with project ramp-up and entitlement effects partly offset by field decline. Natural gas production was 10.1 bln cubic feet per day, down 622 mln cubic feet per day from 2014 due to regulatory restrictions in the Netherlands. Project volumes and entitlement effects offset field decline.
  • Upstream earnings were $2 bln in the second quarter of 2015, down $5.9 bln from the second quarter of 2014.
    • Lower liquids and gas realizations decreased earnings by $4.5 bln, while volume effects increased earnings by $330 mln driven by new developments. All other items decreased earnings by $1.7 bln, including the one-time $260 mln deferred income tax impact related to the tax rate increase in Alberta, Canada, and the absence of prior year asset management gains.
  • Downstream earnings were $1.5 bln, up $795 mln from the second quarter of 2014.
    • Stronger margins increased earnings by $1.1 bln. Volume and mix effects decreased earnings by $80 mln. All other items, including higher maintenance expenses, decreased earnings by $230 mln. Petroleum product sales of 5.7 mln barrels per day were 104,000 barrels per day lower than the prior year's second quarter.

>>> US Early premarket gappers

Early premarket gappers

Gapping up: QTM +29.4%, MXWL +17.6%, SKYW +17.2%, YRCW +13.9%, COLM +11.7%, ZLTQ +10.9%, HTCH +10.3%, ELLI +9.3%, NSU +9.3%, ATEN +8.7%, CCE +8.6%, CRAY +8.4%, EXPE +7.8%, SAND +7.8%, NGVC +6.3%, FRGI +6.1%, CVEO +6%, IMMR +5.8%, PXLW +5.5%, FIX +4.1%, TRP +4%, BCOR +3.4%, BCOR +3.4%, TNDM +3.1%, ISNS +3.1%,TNDM +3.1%, WETF +2.8%, ENH +2.7%, TPX +2.3%, MOH +2.2%, AMGN +1.9%, UHS +1.8%, JUNO +1.7%, WU +1.7%, AUY +1.6%, IDI +1.4%, EVAR +1.3%, CATM +1.2%, SALT +1.1%, DGI +1%, RGC +1%

Gapping down: MILL -28%, OCLS -17.5%, SYNA -14.6%, CPSI -11.9%, OUTR -10%, OCN -9.9%, SZYM -8.8%, QLGC -7.7%, TSYS -7.6%, FLR -7.5%, HBI -6.6%, COHR -6.4%, LNKD -6.1%, RAS -5.2%, FEYE -4.8%, OMCL -4.5%, SQI -4.3%, CHEF -3.8%, BCOV -3.7%, SAM -3.2%, WFM -3%, MTD -2.8%, COHU -2.1%, EA -1.9%, MERC -1.9%, CALD -1.6%, TNAV-1.3%, Q -1.1%, AMCC -1.1%, WY -1.1%, DTLK -0.9%, TXTR -0.9%, CPT -0.7%, FFBC -0.7%, VVUS -0.6%