Corporate | 21 July 2006 07:27

Infineon Technologies AG: Infineon reports results for third quarter of 2006 financial year and provides outlook for the fourth quarter

Corporate news transmitted by DGAP – a company of EquityStory AG. The issuer is solely responsible for the content of this announcement. —————————————————————————— Infineon reports results for third quarter of 2006 financial year and provides outlook for the fourth quarter THIRD QUARTER 2006 RESULTS (April 1 to June 30, 2006) In Euro million Q3 FY06 Q2 FY06 +/- Q3 FY05 +/- Revenues 1.972 1.993 -1% 1.606 23% EBIT 49 28 75% (234) +++ Net loss (23) (26) 12% (240) 90% Loss per share (in Euro) (0,03) (0,03) 0% (0,32) 91% Munich, Germany, July 21, 2006. Third quarter revenues were Euro 1.97 billion compared to Euro 1.99 billion in the prior quarter, reflecting lower sales in the two logic segments that were not entirely offset by increased sales at Qimonda, the company’s memory products business. Net loss in the third quarter was Euro 23 million or 0.03 Euro per share compared to a net loss of Euro 26 million or 0.03 Euro per share in the prior quarter, including charges in connection with the carve-out of Qimonda and valuation allowances of tax assets. EBIT increased to Euro 49 million, from Euro 28 million in the prior quarter, mainly driven by improved results at Qimonda. EBIT included a dilution gain of Euro 30 million in connection with the Initial Public Offering of Inotera Memories, Inc., which was mostly offset by impairment and restructuring charges during the third quarter. “We are pleased with the overall EBIT development in the third quarter,” said Dr. Wolfgang Ziebart, CEO and President of Infineon Technologies AG. “While EBIT in the Automotive, Industrial and Multimarket segment normalized after the exceptionally strong second quarter, the Communication Solutions’ EBIT was negatively affected by restructuring charges and weak development in its wireless business. Qimonda again posted improved results.” OUTLOOK FOR THE FOURTH QUARTER OF THE 2006 FINANCIAL YEAR Beginning with the 2006 financial fourth quarter, Infineon will provide guidance for revenues and EBIT for its non-memory businesses. On this basis, Infineon expects such revenues for the fourth quarter to increase, driven in particular by ramp-ups of products for new customers in the Communication Solutions segment. Sales in the Automotive, Industrial and Multimarket segment are expected to increase slightly. Fourth quarter EBIT for the non-memory businesses is anticipated to improve compared to the third quarter, driven mostly by higher revenues in the Communication Solutions segment. Automotive, Industrial and Multimarket (AIM): In the fourth quarter of the 2006 financial year, Infineon expects revenues and EBIT of its Automotive, Industrial and Multimarket segment to increase slightly. In its automotive business, the company anticipates a seasonally weaker fourth quarter. After two very strong quarters in the company’s industrial business, Infineon expects continued demand in the fourth quarter driven predominantly by seasonality. Sales in the security & ASICs business are expected to re-accelerate after a strong second and a weaker third quarter, driven mainly by an anticipated stronger security and chip-card business. Communication Solutions (COM): In the fourth quarter of the 2006 financial year, Infineon expects revenues and EBIT of the Communication Solutions segment to improve compared to the third quarter. The improvement is expected to be driven mainly by the ramp-up of shipments to new wireless customers. The fourth quarter EBIT results are expected to improve in line with the revenue increase. Qimonda: On May 10, 2006, Inotera Memories, Inc., the company’s joint venture with Nanya Technology Corporation, successfully completed a capital increase and follow-on offering on the Luxembourg Stock Exchange by the issuance of 40 million Global Depositary Shares, representing 400 million common shares, for an issuance price of NT dollar 33 per share. In conjunction with this capital increase, the company realized a dilution gain of Euro 42 million, which will be reflected in Qimonda’s EBIT in the fourth quarter of the 2006 financial year. Infineon’s ownership interest after the capital increase stands at 36 percent. Other Operating Segments and Corporate and Eliminations: Prior to inclusion of potential impairment and restructuring charges, EBIT in Other Operating Segments and Corporate and Eliminations is expected to remain broadly unchanged relative to the previous quarter. The Corporate and Eliminations segment will continue to reflect the intra-group elimination of sales between Infineon and Qimonda. In the third quarter of the 2006 financial year, Infineon reports for the first time its results of operations under its new organizational structure, which became effective on May 1, 2006, following the legal separation of its memory products segment into a stand-alone legal company called Qimonda AG. The results of prior periods have been reclassified to conform to the current period presentation, as well as to facilitate analysis of current and future operating segment information. As a result of the reorganization, certain corporate overhead expenses are no longer apportioned to Qimonda and are instead allocated to Infineon’s two logic segments. D I S C L A I M E R This discussion includes forward-looking statements about our future business. These forward-looking statements include statements relating to future developments in the world semiconductor market, especially the market for memory products, Infineon’s future growth, the benefits of research and development alliances and activities, our planned levels of future investment in the expansion and modernization of our production capacity, the introduction of new technology at our facilities, the continuing transitioning of our production processes to smaller structure sizes, cost savings related to such transitioning and other initiatives, our successful development of technology based on industry standards, our ability to offer commercially viable products based on our technology, our ability to achieve our cost savings and growth targets, and the impact of our carve-out of Qimonda, our memory products business, and any financing or further corporate reorganization measures in that regard. 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, the outcome of antitrust investigations and litigation matters, 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. Infineon, the stylized Infineon Technologies design are trademarks and service marks of Infineon Technologies AG. All other trademarks are the property of their respective owners. Contact: Investor Relations, Tel.: +49 89 234-26655, Fax: +49 89 234-9552987 (c)DGAP 21.07.2006 ——————————————————————-