Silicon Valley continues to take a pounding on the markets.
Net revenues for the 4th quarter were USD $58.4 million, a drop of nearly USD $40 million from the 3rd quarter of 2008.
In 2007, the company had net revenues of USD $107.4 million in the 4th quarter alone.
To add to its woes, product revenues for the 4th quarter of 2008 were USD $46.3 million, which is close to USD $30 million less than in the 3rd quarter of 2008.
Only technology licensing revenues remain steady, at USD $12.1 million for the 4th quarter of 2008.
These numbers have not changed much over the past 2 years.
Rough estimates indicate that loss from operations for the 4th quarter was close to USD $10 million compared with income from operations of USD $4 million in the 3rd quarter of 2008.
The loss in the 4th quarter of 2007 was double that approximating close to USD $19 million.
The net loss for SST continues to mount.
SST’s shares were estimated at $0.31 per share based on approximately 95.5 million diluted shares in the 4th quarter of 2008.
Incorporated in the 4th quarter 2008 net loss was the price of streamlining fee estimated at USD $2.5 million, an impairment charge connected to the company’s venture in Grace Semiconductor Manufacturing Corporation of USD $5.6 million and an impairment cost associated to the company’s assets in ACET of USD $9.7 million.
By contrast, the company recorded a net income of USD $4.9 million or 40.05 per share based on about 99.7 million diluted shares.
SST finished the 4th quarter of 2008 with USD $131.7 million in cash equivalents, short-term investments and long term marketable debt securities.
These numbers are down by 1.1 million from the estimated USD $131.8 million at the end of Sept 2008.
So what does SST management have to say about this continued decline in profits?
Bing Yeh, president, and CEO of SST said: "The unprecedented sudden drop in demand of semiconductor products during the fourth quarter resulting from the deepening global financial crisis has caused significant decline in our revenues."
He goes on to add that: "This persistent difficult economic environment necessitated that we accelerate our planned changes to our business and focus in late 2008.
"We took important steps to reduce our inventory, streamline our organizational structure, and cut our expenses by focusing our efforts on our most strategic initiatives with the goal of returning the company to profitability.
"With these organizational changes, we believe that we can control our expenses while continuing to execute our product and technology roadmap and position SST for growth as the economy recovers."
For the first Quarter of 2009, revenues for SST are projected to be in-between USD $39 million and $45 million.
All this depends on the gross margin discrepancies, which is expected to very between 38-40 per cent.
However, the way 2009 has started, the markets remains unpredictable and the above projections mean little.