Corporate | 20 January 2003 07:19

Infineon Technologies AG english

Infineon Reports First Quarter Results for Fiscal Year 2003 (to Dec 31, 2002) Corporate-news announcement sent by DGAP. The sender is solely responsible for the contents of this announcement. ——————————————————————————– Infineon Technologies today announced results for its first quarter in fiscal year 2003, ended December 31, 2002. The company had revenues of Euro 1.52 billion, an increase of 10 percent sequentially and 47 percent year-on-year. The revenue increase was mainly driven by higher demand for memory products and semiconductors used in mobile phones and the continued strong performance of the automotive & industrial segment. The revenue increase also reflects the first time consolidation of a full quarter of revenues of Ericsson Microelectronics, which Infineon acquired in September 2002. Dr. Ulrich Schumacher, President and CEO of Infineon Technologies AG commented: “Our focus on technology and cost leadership resulted in further market share gains. We improved our revenue performance sequentially and year-on-year and achieved profitability in our memory products group by improved pricing, product mix and by significantly reducing the fully loaded costs of our memory chips.” Quarterly EBIT (earnings before interest and taxes) was a loss of Euro 31 million, a strong improvement from a loss of Euro 292 million in the previous quarter, which included exceptional effects of 119 million Euro, and from a loss of Euro 564 million in the first quarter of the last fiscal year. The improved earnings performance was mainly due to further cost reductions in the memory product segment and a shift in sales towards higher margins products. Net loss amounted to Euro 40 million compared to a net loss of Euro 506 million in the previous quarter, which included a non-cash charge of Euro 275 million to establish a deferred tax valuation allowance. The first quarter tax expense continues to reflect a valuation allowance for tax losses incurred in certain tax jurisdictions according to US GAAP. Basic and diluted loss per share for the first quarter of fiscal year 2003 was Euro 0.06, improving from a loss per share of Euro 0.72 in the previous quarter and Euro 0.48 year-on-year. Infineon’s gross cash position, representing cash and cash equivalents, marketable securities, and restricted cash, amounted to Euro 1.6 billion, down sequentially from Euro 2 billion. The decrease in gross cash was mainly due to investments for 300mm volume production and for the introduction of the next shrink to 0.11 micron technology, the build-up of inventories, principally in memory products, and a volume related increase in accounts receivable. OUTLOOK UNTIL JUNE 2003 “Although we see first signs of a positive market trend it is still too early to speak of a sustained overall market improvement. We look with cautious optimism into the future and expect a further stable development of demand in most segments. But we also expect an ongoing difficult market environment with continued pricing pressure in our wireline communications and secure mobile solutions segments in the first half of calendar year 2003,” commented Dr. Schumacher. For its secure mobile solutions segment, Infineon expects increased demand for GSM/GPRS mobile handsets in 2003. The company currently forecasts an increase to 440 million units sold in calendar year 2003. However, during the second quarter the company expects a slight decrease in sales volumes due to seasonally reduced demand after Christmas. For the security and chip card ICs market Infineon expects a seasonal weakness in demand and continued strong pricing pressure for security controllers used in mobile communications (SIM card ICs). However, for the second half of calendar year 2003 Infineon still expects an overall market improvement. Further reductions of approximately 10 percent in capital expenditures for global wireline telecom infrastructure are expected for 2003 following a deterioration of approximately 37 percent in 2002, according to industry analysts. Restricted enterprise and carrier spending for network equipment is expected to continue to affect Infineon’s fiber optics and optical networking businesses. However, as the DSL roll-out gains momentum, the company expects to benefit from stronger demand for broadband access (ADSL, VDSL), especially in Asia and Japan. Despite strong pricing pressure in the automotive electronics and automotive semiconductor markets, Infineon anticipates that further productivity increases combined with leading product performance in its automotive semiconductor business will enable the company to continuously gain market share. Infineon expects the strongest growth to be in power semiconductors and in power management and supply products. Infineon anticipates that the second quarter of fiscal year 2003 will only see a slight increase of demand for memory products, following robust sales during the first quarter, which included the Christmas season. The development of prices will depend on the market’s psychology and end-consumer behavior. A sustained improvement in prices during calendar year 2003 would require stronger demand from the corporate replacement cycle and increased infrastructure investments. “We are among the first who returned to profitability in the memory market. Our continued investment in technology for 300mm production is beginning to pay off. We are confident that our successful shrink roadmap combined with the expansion of our strategic manufacturing cooperations will enable us to gain further market share and establish Infineon as a top three player in the global DRAM market in the foreseeable future,” said Dr. Schumacher. TELEPHONE CONFERENCE INFORMATION Infineon Technologies will host a telephone conference with analysts and investors on January 20, 2003, 8:00 am Central European Time (CET), 2:00 am Eastern Standard Time (U.S. EST), to discuss operating performance of the first quarter of fiscal year 2003. A broadcast of the conference will be available live and for download on Infineon’s web site at: http://www.infineon.com DISCLAIMER This discussion includes forward-looking statements about our future business. These forward-looking statements are subject to a number of uncertainties, including trends in demand and prices for semiconductors generally and for our products in particular, the success of our development efforts, both alone and with our partners, the success of our efforts to introduce new production processes at our facilities and the actions of our competitors, the availability of funds for planned expansion efforts, as well as the other factors mentioned herein. As a result, our actual results could differ materially from those contained in the forward-looking statements. end of message, (c)DGAP 20.01.2003 ——————————————————————————– WKN: 623100; ISIN: DE0006231004; Index: DAX Listed: Amtlicher Markt in Frankfurt; Freiverkehr in Berlin, Bremen, Düsseldorf, Hamburg, Hannover, München, Stuttgart; NYSE 200719 Jän 03