Infineon Technologies AG

Earnings Release • Jul 22, 2003

News Details

Ad-hoc | 22 July 2003 07:31

Infineon Technologies AG english

Infineon announces Third Quarter Results for Fiscal Year 2003 Ad-hoc-announcement transmitted by DGAP. The issuer is solely responsible for the content of this announcement. ——————————————————————————– Infineon announces Third Quarter Results for Fiscal Year 2003 THIRD QUARTER RESULTS (April 1 to June 30, 2003) Infineon Technologies AG, the world’s six-largest semiconductor manufacturer, had third quarter revenues from continuing operations of EUR 1.47 billion, remaining almost flat sequentially and increasing 11 percent year-on-year. Net loss amounted to EUR 116 million compared to a net loss of EUR 328 million in the previous quarter and a net loss of EUR 76 million in the third quarter of the last fiscal year. This strong sequential improvement is mainly due to increased productivity, further cost reductions and no significant inventory valuation effect compared to the previous quarter. The quarterly loss included impairment charges of EUR 68 million, reflecting a goodwill write down of the company’s interest in Catamaran Communications. The net loss also included a tax benefit of EUR 10 million compared to a tax expense of EUR 96 million in the previous quarter. Basic and diluted loss per share for the third quarter of fiscal year 2003 was EUR 0.16, compared to a loss per share of EUR 0.45 in the previous quarter and EUR 0.11 year-on-year. EBIT significantly improved to a loss of EUR 115 million, compared to a loss of EUR 223 million in the previous quarter, but up from a loss of EUR 110 million in the third quarter of the last fiscal year. Infineon’s gross cash position amounted to EUR 2.4 billion, up sequentially from EUR 1.5 billion. The increase in gross cash was mainly due to the convertible bond issued in June 2003. In addition, the company has decided to divest of its interest in ProMOS Technologies and from April 1, 2003 its investment in ProMOS is no longer accounted for on the equity method and is instead treated as marketable securities. Free cash flow significantly improved from a negative EUR 90 million in the previous quarter to a positive EUR 11 million. This improvement mainly reflects higher operating cash flow and lower capital expenditures compared to the previous quarter. end of ad-hoc-announcement (c)DGAP 22.07.2003 Issuer’s information/explanatory remarks concerning this ad-hoc-announcement: Dr. Ulrich Schumacher, President and CEO of Infineon Technologies AG commented: “Although we currently see a more positive market environment, especially for DRAM, last quarter still was very difficult due to the unfavorable Euro/Dollar exchange rate conditions and ongoing strong pricing pressure. However, we achieved a solid revenue performance in most of our business groups and significantly reduced our net loss by EUR 212 million sequentially. Without the impairment charge our net loss would have been EUR 48 million.” On June 5, 2003, Infineon issued subordinated convertible notes due 2010 for gross proceeds of EUR 700 million. The company decided to take advantage of the low interest rates available in the European convertibles market to improve its cash position. The notes may be converted into up to 68 million ordinary shares of Infineon Technologies AG. NINE MONTHS RESULTS (October 1, 2002 to June 30, 2003) Total revenues for the first nine months of fiscal year 2003 were EUR 4.4 billion, up 22 percent from EUR 3.6 billion in the same period last year. Net loss amounted to EUR 484 million, compared to a net loss of EUR 515 million year-on-year. The company had tax expenses of EUR 98 million during the first nine months of fiscal year 2003 compared to a tax benefit of EUR 345 million during the comparable period of fiscal year 2002. EBIT for the first nine months of this fiscal year was a loss of EUR 369 million, a significant improvement from an EBIT loss of EUR 845 million year-on-year. OUTLOOK UNTIL DECEMBER 2003 “We have seen first signs of a positive market trend in the last quarter and thus look forward with optimism for a stronger improvement of demand both in our logic segments as well as our memory products segment in the second half of calendar year 2003. In the light of the continuing uncertainty of the global economic situation, which makes it difficult to predict consumer demand in our target applications, we will continue to implement our successful cost reduction and restructuring programs,” commented Dr. Schumacher. For its Secure Mobile Solutions segment, Infineon expects a further moderate increase of demand for GSM/GPRS mobile handsets and Bluetooth products. In addition, the company sees a positive development of demand for security solutions, particularly for ID-systems, but also expects overall continued pricing pressure. Agreeing with many industry analysts, Infineon expects further reductions in capital expenditures in the global wireline telecom infrastructure market in 2003, but continues to expect moderate growth in Europe. Infineon expects a further positive development of demand for broadband access technology, particularly in Asia. In the automotive electronics and automotive semiconductor markets, Infineon sees weaker demand. However, we anticipate this to be primarily a seasonal effect since the automotive electronics market is expected to grow further despite the current weakness in the overall automotive industry. For the logic segments as a whole, Infineon expects a further overall improvement in revenues as well as EBIT in the fourth quarter of fiscal year 2003. Infineon has seen continuously growing demand and steadily increasing prices for DDR memory products since the beginning of June 2003. Infineon expects a further positive development of demand mainly driven by gradually increasing corporate replacement investments, the upcoming back-to-school season and the move towards higher Megabyte per Box and DRAM demand due to the introduction of the new INTEL Springdale chipset offering Dual Channel DDR technology for computers. TELEPHONE CONFERENCE INFORMATION The Management Board of Infineon Technologies will conduct a telephone conference with analysts and institutional investors on July 22, 2003 at 3:30 a.m. Eastern Standard Time (U.S. EST), 9:30 a.m. Central Europe Time (CET), to discuss operating performance of the third quarter fiscal year 2003. A broadcast of the telephone 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 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 (Prime Standard); Freiverkehr in Berlin- Bremen, Düsseldorf, Hamburg, Hannover, München und Stuttgart; NYSE 220731 Jul 03