Troubled handset silicon vendor ST-Ericsson announced a second quarter loss of US$318 million, compared with a Q2 2011 loss of US$221 million, on revenue of US$344 million, down from US$385 million.

The company said that its sales had increased by 19 percent compared with the first quarter of 2012, reflecting a “significant ramp of volumes” of its NovaThor integrated modem/application processors to major customers.

ST-Ericsson named Samsung and Sony Mobile as customers for NovaThor, as well as “several new Chinese key players.”

Noting a sequential improvement in its performance, Didier Lamouche, the company’s president and CEO, noted: “While these indicators are encouraging, we recognise that further improvements in the execution of our critical programs are needed. Moreover, we operate in a very dynamic, fast-changing market and a highly competitive environment. In this context our primary focus is on delivering improvements of operating results and cash flow.”

Lamouche also said that the company is “executing in a timely manner” on a plan to “reposition our whole business model,” including the transfer of the application processor development team to parent STMicroelectronics.

ST-Ericsson’s prolonged losses have also taken their toll on its net financial position, which stands at negative US$1.2 billion, compared with negative US$427 million twelve months ago. It also had negative operating cash flow for the quarter of US$249 million, compared with negative US$233 million in Q2 2011.

The company said that “given, on one hand, the very substantial revenue growth during the second quarter and, on the other hand, the macro-economic and industry environment, ST-Ericsson expects net sales to be approximately flat sequentially for the third quarter 2012.”