STMicro Imaging Sales Up, Profits Down

STMicro has reported Q4 2007 results. Imaging business is a part MMC (Mobile, Multimedia and Comms Group) which is a part of ASG (Application Specific Product Groups, 4 groups in total). Here is all the ASG groups combined performance:

"ASG's revenues grew 9.1% sequentially and 13.3% year-over-year, led by imaging products, [etc]. ASG's operating profit declined sequentially due to the sequential increase in imaging device weighting" in the groups product mix.

To me this sounds like STM's imaging business is losing money - correct me if I'm wrong.

STM's CEO Carlo Bozotti clarifies in SeekingAlpha transcrpt:

"The ASG gross margin in Q4 has reflected a significant base expansion of sales in the imaging business in camera modules. As you are familiar with this business, structurally ramps at lower margin due to the significant pass through of components like lenses. Frankly, we have also to admit that this is not, given the current competitive structure of the business, one of our most profitable and highest margin business. So I would characterize this Q3 to Q4 dynamic as driven substantially by some very positive news, by the way, of sales expansion and addition of [indiscernible] and camera modules."