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STMicro sees little pickup in first-half; shares hit

(Updates with details, share price)

By Eric Auchard

FRANKFURT, April 30 (Reuters) - Franco-Italian semiconductor maker STMicroelectronics posted slightly weaker-than-expected first-quarter results on Thursday and warned it anticipated little pickup in the current quarter.

STMicroelectronics reported a first-quarter net loss of 3 cents per share. Analysts, on average, had been looking for a profit of 1 cent per share, according to Thomson Reuters data.

It reported a gross margin of 33.2 percent, matching ST's own forecasts but slightly below the 33.5 percent analysts had forecast on average, according to Thomson Reuters data.

Analysts expect gross margins to rebound above 36 percent in the second half of 2015, but ST predicted its gross margin, at least in the second quarter, would remain mired around 33.8 percent, plus or minus 2 percentage points. The current consensus was 35.4 percent, at the high end of ST's range.

Shares of ST tumbled 8.5 percent to 7.52 euros in early trading in Paris.

Based on anticipated currency benefits, the stock so far this year had hurtled upward 33 percent as of Wednesday, marking it as one of the top performers in the STOXX European Technology index, compared with 16 percent for the overall index.

Beyond typical seasonal weakness, the company's turnover was hurt by the weakening of the euro and by lower sales of personal-computer related components, Carlo Bozotti, the company's president and chief executive, said in a statement.

ST, Europe's largest chipmaker until Netherlands-based rival NXP closes its proposed deal to buy Freescale, suffers relatively lower margins than U.S.-based peers due largely to the higher fixed cost of operating in Europe.

Still, because upward of 90 percent of its sales are in dollars but 60 percent of operating expenses are in euros, investors have hoped that ST will prove to be a major beneficiary of steep declines in the euro's value. However, to date, its currency hedges have offset most of these benefits.

ST posted a quarterly revenue decline of 6.5 percent from a year-ago to $1.71 billion (1.54 bln euros), at the low end of its guidance for a drop around 5 percent, plus or minus several percentage points, but in line with analysts' muted forecasts.

The company said second-quarter revenue would be in a range from flat to up 7 percent from the first-quarter. The midpoint of that forecast would be around $1.77 billion, up 3.5 percent from the first quarter, well short of the $1.82 billion that analysts had estimated, on average, for the second quarter. (1 euro = $1.1120) (Editing by James Regan/Jeremy Gaunt)