Corporate | 1 February 2011 07:30
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Infineon Technologies AG / Key word(s): Quarter Results
1Q 2011 RESULTS: SUCCESS STORY CONTINUES WITH RECORD 19.2 PERCENT TOTAL SEGMENT RESULT MARGIN ON REVENUE FROM CONTINUING OPERATIONS OF EURO 922 MILLION
QUARTERLY REVENUE DOWN 2 PERCENT SEQUENTIALLY LARGELY DUE TO CURRENCY EFFECTS
FIRST QUARTER 2010 RESULTS (October 1 to December 31, 2010)
Neubiberg, Germany – February 1, 2011 – Infineon Technologies AG (FSE: IFX / OTCQX: IFNNY) today reported results for the first quarter of the 2011 fiscal year, ended December 31, 2010. 'In the first fiscal quarter, we continued with the excellent performance of the 2010 fiscal year. Going forward, we expect to grow faster than the market and see another quarter of revenue growth with consistently high margins. This confirms once again, that targeting less volatile, high-margin markets, driven by the worldwide trends towards more energy efficiency, mobility and security is the right strategy for Infineon', says Peter Bauer, CEO of Infineon Technologies AG.
FISCAL FIRST QUARTER 2011 REVIEW: RECORD TOTAL SEGMENT RESULT MARGIN WITH SALES DECLINING LARGELY DUE TO FOREIGN EXCHANGE IMPACT
First quarter Total Segment Result was Euro 177 million, an increase of four percent compared to Euro 171 million in the prior quarter. Total Segment Result margin in the first quarter reached 19.2 percent, up from 18.2 percent in the fourth quarter. Total Segment Result margin marked an all-time-high on a comparable basis. Infineon reported income from continuing operations of Euro 149 million, down from Euro 193 million in the fourth quarter. The decline occurred mainly because income taxes in the fourth quarter of the 2010 fiscal year contained a non-recurring benefit of Euro 69 million from recording a deferred tax asset. Basic earnings per share from continuing operations were Euro 0.14, down from Euro 0.18 in the previous quarter. Diluted earnings per share from continuing operations were Euro 0.13 versus Euro 0.16 in the preceding quarter. Income from discontinued operations, net of income taxes, was Euro 83 million for the first quarter, down from Euro 197 million in the preceding quarter. Net income from discontinued operations decreased as income from discontinued operations in the fourth quarter of the 2010 fiscal year contained a non-recurring benefit from recording a Euro 82 million deferred tax asset related to the expected gain on the sale of the Wireless mobile phone business and as the first quarter result of the 2011 fiscal year contained a negative valuation impact of foreign exchange options used to hedge the proceeds from the divestiture of Infineon's Wireless mobile phone business of Euro 32 million. Net income for the group was Euro 232 million in the first quarter, a decrease from Euro 390 million in the previous quarter. First quarter basic earnings per share were Euro 0.21 and diluted earnings per share were Euro 0.20, down from Euro 0.36 and Euro 0.33, respectively, for basic and diluted EPS in the fourth quarter of 2010 fiscal year.
Working capital amounted to negative Euro 71 million at the end of the first quarter, but deteriorated from negative Euro 130 million at the end of the prior quarter, mainly due to lower provisions and higher inventories. Of the increase in inventories from Euro 514 million at the end of the prior quarter to Euro 573 million at the end of the first quarter of the 2011 fiscal year, an amount of approximately Euro 20 million is related to the closing of the divestiture of the Wireless mobile phone business. The company also recorded an increase in work-in-progress in anticipation of higher revenues going forward.
FULLY DILUTED SHARE COUNT DOWN BY A FULL PERCENTAGE POINT AS INFINEON BUYS-BACK ITS 2014 CONVERTIBLE
INFINEON IS TAKING LEGAL ACTION AGAINST QIMONDA'S INSOLVENCY ADMINISTRATOR Infineon Technologies AG has brought a declaratory action in District Court Munich I against Dr. Michael Jaffé, the insolvency administrator dealing with the bankruptcy estate of Qimonda AG. When Infineon's memory business was carved out to form Qimonda AG in 2006, Infineon transferred, among other things, patents and other intellectual property rights to the Qimonda Group. At the same time, Infineon retained rights of use to these patents and other intellectual property rights, secured the same for its licensees, and reached agreements with the Qimonda Group on licenses to future intellectual property rights. Qimonda's insolvency administrator, however, asserts that, as a result of the insolvency of Qimonda AG, these rights of use no longer apply. The purpose of the legal action is for the court to determine that Infineon's and its licensees' rights to the aforementioned intellectual property rights of the Qimonda Group remain valid. Prior to bringing this action, Infineon negotiated intensively with the insolvency administrator with a view to resolving the differences of opinion out of court. However, as these efforts have failed to produce an amicable settlement, it is now in the interests of Infineon and its licensees that the legal issues in dispute are settled in court through the legal action brought today. Besides claiming that the aforementioned rights of use no longer apply, the insolvency administrator, as noted in Infineon's Annual Report for fiscal 2010, has also sought to assert various claims against Infineon: In connection with (i) Infineon's earlier position as a shareholder of Qimonda Dresden GmbH & Co. ohG, (ii) Qimonda's sale of its interest in Inotera to Micron, and (iii) the allegation that Infineon utilized a previously formed shell company and 'economically reestablished' that company through the transfer of the memory business; regarding the topic the administrator has, as reported, brought declaratory action against Infineon.. A detailed account of the issues, risks and liabilities involved in Qimonda AG's insolvency is given in the Notes to the Consolidated Financial Statements in Infineon's Annual Report 2010 (Note 6 – Disposals and Discontinued Operations, and Note 38 – Litigation and Government Inquiries ). Provisions formed by Infineon at December 31, 2010, in connection with the Qimonda insolvency total Euro 104 million. This figure includes a sum set aside by the company based on the positions taken in the settlement negotiations – a sum which the company will continue to increase in forthcoming quarters and which, from today's perspective, is estimated to amount to a total future charge against earnings of Euro 80 million. Infineon will continue to defend itself resolutely against the claims being made and will draw, as necessary, on all legal remedies available. Nonetheless, the company remains open to finding a settlement with the insolvency administrator in respect of all of the claims he has advanced so that a conclusive solution can be found to all of the issues at stake.
OUTLOOK FOR THE SECOND QUARTER OF THE 2011 FISCAL YEAR: A QUARTER OF REVENUE GROWTH WITH CONSISTENTLY HIGH MARGINS
OUTLOOK FOR THE FISCAL YEAR 2011: RAISING ANTICIPATED GROWTH AND MARGIN
All figures in this quarterly information are preliminary and unaudited.
ANALYST AND PRESS TELEPHONE CONFERENCES
IFX FINANCIAL CALENDAR (*preliminary date) – Feb 17, 2011 2011 Annual General Meeting of Shareholders – May 3, 2011* Earnings Release for the Second Quarter of the 2011 Fiscal Year – Jul 28, 2011* Earnings Release for the Third Quarter of the 2011 Fiscal Year – Nov 17, 2011* Earnings Release for the Fourth Quarter and Full 2011 Fiscal Year
ABOUT INFINEON
D I S C L A I M E R
These forward-looking statements are subject to a number of uncertainties, including broader economic developments, trends in demand and prices for semiconductors generally and for our products in particular, as well as for the end-products that incorporate our products, the success of our development efforts, both alone and with partners; the success of our efforts to introduce new production processes at our facilities, the actions of competitors; the continued availability of adequate funds, the outcome of antitrust investigations and litigation matters, and the outcome of Qimonda's insolvency proceedings, as well as the other factors mentioned in this press release. As a result, Infineon's actual results could differ materially from those contained in these forward-looking statements. You are cautioned not to place undue reliance on these forward-looking statements. Infineon does not undertake any obligation to publicly update or revise any forward-looking statements in light of developments which differ from those anticipated. End of Corporate News 01.02.2011 Dissemination of a Corporate News, transmitted by DGAP – a company of EquityStory AG. The issuer is solely responsible for the content of this announcement. DGAP’s Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases. Media archive at www.dgap-medientreff.de and www.dgap.de |
| Language: | English | |
| Company: | Infineon Technologies AG | |
| Am Campeon 1-12 | ||
| 85579 Neubiberg | ||
| Deutschland | ||
| Phone: | +49 (0)89 234-26655 | |
| Fax: | +49 (0)89 234-955 2987 | |
| E-mail: | investor.relations@infineon.com | |
| Internet: | www.infineon.com | |
| ISIN: | DE0006231004 | |
| WKN: | 623100 | |
| Listed: | Regulierter Markt in Frankfurt (Prime Standard); Freiverkehr in Berlin, Düsseldorf, Hamburg, Hannover, München, Stuttgart; Terminbörse EUREX | |
| End of News | DGAP News-Service |
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| 110615 01.02.2011 |