Infineon Technologies AG

Earnings Release • Jul 19, 2002

News Details

Ad-hoc | 19 July 2002 11:02

Infineon Technologies AG english

Infineon Announces Third-Quarter and Nine-Months FY 2002 Results (ended June 30) Ad-hoc-announcement transmitted by DGAP. The issuer is solely responsible for the content of this announcement. ——————————————————————————– T H I R D Q U A R T E R R E S U L T S (April 1 to June 30, 2002) Semiconductor manufacturer Infineon Technologies announced results for its third quarter of fiscal year 2002 ended June 30, 2002, with revenues of EUR 1.4 billion, an increase of 1 percent from the previous quarter and 10 percent from the third quarter of fiscal year 2001. The revenue increase was primarily driven by improved demand for security controllers in mobile communications and banking applications, broadband access solutions and steady demand for automotive and industrial power products. EBIT (earnings before interest and taxes) amounted to a loss of EUR 107 million, an improvement from a loss of EUR 178 million in the previous quarter and from a loss of EUR 598 million in the third quarter of fiscal year 2001, which included inventory write downs of EUR 209 million and other charges of EUR 51 million. The sequential EBIT improvement reflects cost reductions in all business segments and relatively steady demand in most business groups. The targets of Infineon’s Impact cost savings program with respect to EBIT and cash savings have been achieved. Net loss amounted to EUR 76 million, a sequential improvement from a loss of EUR 108 million in the previous quarter and from a loss of EUR 371 million year-on-year. Loss per share (LPS) for the third quarter was EUR 0.11 compared with a LPS of EUR 0.16 in the previous quarter and with a LPS of EUR 0.59 in the third quarter of the last fiscal year. Infineon’s gross margin was 18 percent, down from a gross margin of 21 percent in the previous quarter, but up from a negative gross margin of 1 percent year-on-year. Sequential gross margin decline was mainly due to the overall tough pricing environment, particularly the significant price decline for memory chips. At June 30, 2002, Infineon had a gross cash position, representing cash and marketable securities available for sale, of EUR 1.9 billion and generated positive cash flow from operating activities of EUR 293 million during the quarter. end of ad-hoc-announcement (c)DGAP 19.07.2002 Issuer’s information/explanatory remarks concerning this ad-hoc-announcement: The full quarterly report will be posted on the Internet at http://www.infineon.com/news. “Infineon continued to improve its business performance and gained market share in an ongoing difficult market environment. We made further progress in cost reductions and increased revenues as well as improving our earnings in communications and automotive electronics despite continuous strong pricing pressure and adverse market conditions for memory products,” said Dr. Ulrich Schumacher, President and CEO of Infineon Technologies AG. N I N E M O N T H S R E S U L T S (October 1, 2001 to June 30, 2002) Total revenues for the first nine months of fiscal year 2002 were EUR 3.82 billion, down 17 percent from EUR 4.59 billion in the same period last year. EBIT for the first nine months of this year was a loss of EUR 850 million, which included a one-time pre-tax gain of EUR 39 million from the sale of the infrared components business, compared to a loss of EUR 142 million in the first nine months of the last fiscal year, which included a one-time pre-tax gain of EUR 202 million from the sale of the Image and Video business. Net loss amounted to EUR 515 million, compared to a net loss of EUR 68 million year-on-year. O U T L O O K F O R 2 0 0 2 The market outlook for the second half of calendar 2002 shows signs of a moderate improvement in demand. However, Infineon expects market conditions with strong pricing pressure in most of the company’s business groups to remain in the months ahead. Nevertheless, Infineon believes due to its product and application focus and improved cost position to be well positioned to further grow its market share even in a tough market environment. After the strong price decline for memory products due to a seasonal market weakness in April and May 2002, prices have improved towards the end of the third quarter. Due to growing bit-demand at the end of June, Infineon was able to increase its sold bit-volume compared to the second quarter. Infineon expects a further increase in demand, depending on the positive development of the upcoming back-to-school season, the annual Christmas business and the next corporate upgrade cycle in PC and infrastructure investments. In the market for cell phones Infineon anticipates moderate growth, driven primarily by the further introduction of GSM/GPRS mobile handsets. The company also expects significant growth for Bluetooth applications in the next quarters leading to an anticipated worldwide market volume of more than 45 million units sold in calendar 2002. Infineon expects the market recovery for security and chip card ICs to continue. While mobile communications remain moderate, growth drivers are expected to be areas such as banking, secure identification and entertainment. However, due to the highly competitive market environment, the company expects ongoing strong pricing pressure in this segment. The market for telecom infrastructure is expected to remain difficult, due to the worldwide significant reduction of capital expenditure in this segment, which is forecasted to drop by more than 30 percent compared to 2001. However, the company believes that the broadband access market (ADSL/VDSL) will continue to grow modestly in calendar 2002, especially in Asia and Japan. Worldwide car production in calendar 2002 is forecasted by market experts to decline moderately, particularly in Europe. However, Infineon believes that its automotive electronics business will benefit from a strategic positioning at leading customers and in new applications such as telematics and infotainment, higher standards for safety as well as body & convenience. At the same time the trend towards consolidation among car manufacturers and automotive suppliers is expected to increase. T E L E P H O N E C O N F E R E N C E I N F O R M A T I O N The Management Board of Infineon will conduct a telephone conference with analysts on July 19, 2002 at 10:15 a.m. (Eastern), 4:15 p.m. (CET). The broadcast of the telephone conference will be available both live and for replay on Infineon’s web site at: http://www.infineon.com. 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 of 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 transitioning of our production processes to smaller structures, 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. 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. ——————————————————————————– WKN: 623100; ISIN: DE0006231004; Index: DAX Listed: Amtlicher Markt in Frankfurt; Freiverkehr in Berlin, Bremen, Düsseldorf, Hamburg, Hannover, München, Stuttgart; NYSE 191102 Jul 02