Infineon Technologies AG

Earnings Release • Apr 21, 2004

News Details

Ad-hoc | 21 April 2004 12:11

Infineon reports 2. Quarter and Half Year 2004 Results (ended March 31)

Ad-hoc-announcement transmitted by DGAP. The issuer is solely responsible for the content of this announcement. ——————————————————————————– Infineon reports 2. Quarter and Half Year 2004 Results (ended March 31) SECOND QUARTER RESULTS (January 1 to March 31, 2004) Infineon Technologies AG, one of the world’s leading semiconductor manufacturers, today announced results for its second quarter and first half of fiscal year 2004, ended March 31, 2004. In the second quarter, the company had revenues of Euro 1.671 billion, an increase of 3 percent sequentially and 13 percent year-on-year. The sequential growth was mainly achieved through a further increase in revenues from the Automotive & Industrial business group, and higher sales volume for Memory Products. The year-on-year increase also reflected significantly improved Secure Mobile Solutions revenues. Sequential quarterly revenue improved despite continued price decline in some product segments, and the negative impact of the weakening US dollar exchange rate. Net income in the second quarter increased to Euro 39 million, compared to Euro 34 million in the previous quarter, and a net loss of Euro 328 million in the second quarter of the last fiscal year. Quarterly EBIT (Earnings Before Interest and Taxes) of Euro 71 million was comparable to the Euro 70 million in the previous quarter, and showed a substantial improvement from the loss of Euro 221 million in the second quarter of the last fiscal year. The sequential quarterly earnings increase in Secure Mobile Solutions and Corporate & Reconciliation offset lower earnings in Memory Products and Other Operating Segments. The reversal in Corporate & Reconciliation of a Euro 32 million provision for licenses which are no longer required due to a favorable ruling in a legal proceeding, was substantially offset by increased impairment charges, higher restructuring costs and increased provisions for license and legal matters. The year-on-year increase reflected reduced losses in Wireline Communications, and significantly improved profitability for Memory Products and Secure Mobile Solutions. Basic and diluted earnings per share were consistent at Euro 0.05 for the second and first quarter, and reflect a significant year-on-year improvement from a loss per share of Euro 0.45. Infineon’s gross cash position, representing cash and cash equivalents, marketable securities and restricted cash, amounted to Euro 2.9 billion, increasing sequentially from Euro 2.8 billion. Free cash flow, representing cash from operating and investing activities excluding purchases or sales of marketable securities, significantly improved to Euro 53 million, up sequentially from negative Euro 63 million in the previous quarter. The improvements in both gross cash position and free cash flow primarily reflect higher operating cash flows compared to the previous quarter. end of ad-hoc-announcement (c)DGAP 21.04.2004 Issuer’s information/explanatory remarks concerning this ad-hoc-announcement: “In the second quarter, Infineon’s business continued to develop positively,” said Max Dietrich Kley, acting CEO of Infineon Technologies AG. “Business performance not only improved because of the overall strong customer demand but also because of improved productivity. By achieving this result, we have reached another milestone on our path towards profitable growth. We are confident that by executing on our strategic plan, further progress can be shown during the remainder of this fiscal year.” HALF YEAR RESULTS (October 1, 2003 to March 31, 2004) Total revenues for the first half of fiscal year 2004 were Euro 3.29 billion, up 13 percent from Euro 2.93 billion in the same period last year. Net income for the first half of this fiscal year amounted to Euro 73 million, compared to a net loss of Euro 368 million year-on-year. EBIT for the first half of this fiscal year increased to Euro 141 million, a significant improvement over the EBIT loss of Euro 250 million in the first half of the last fiscal year. Outlook for the Second Half of Fiscal Year 2004 Infineon expects further revenue growth in its Automotive & Industrial segment during the rest of fiscal year 2004, despite continued pricing pressure. The introduction of new car models at the end of the second quarter led to rising automotive production, indicating signs of growing confidence in a market recovery of the automotive Industry. The company expects the positive seasonal impact on the market for power management & supply products and the improving high power market to drive growth in the industrial business as well. In its Wireline Communications segment, Infineon expects continued modest growth in revenues over the next two quarters, driven by its broadband access business and the addition of the ADMtek product line. The company will continue restructuring efforts in the upcoming quarters to achieve a business improvement over the year. For the second half of fiscal year 2004, Infineon expects continued solid growth in the overall Secure Mobile Solutions segment. Demand is anticipated to remain strong for the company’s baseband, transceiver ICs, and complete handset platforms. Wireless infrastructure is expected to grow on the back of the ramp- up of UMTS and favorable design-win activity. Commodity parts, such as discretes, are likely to benefit from stabilization in pricing due to tightening capacity. Strong volume demand for security controllers coupled with significant productivity improvement measures are projected to result in further growth and an improvement in profitability. For the second half of the fiscal year, Infineon anticipates further increasing demand for Memory Products with a positive effect on the development of average prices. At the same time, the company sees production and bit shipments to grow towards the second half of the calendar year. Through the introduction of a variety of new commodity and specialty DRAMs in the second half of the fiscal year, the business group expects to increase its flexibility to orient its product mix towards market demand. “Judging from the current demand in our logic business, as well as our production plans, and the price developments in Memory Products, we expect continued growth in revenues for the rest of fiscal year 2004. Profitability and efficiency in the overall business, and the steady execution of our strategy, will be our top objectives during the next six months. In doing so, we are confident that we can further improve Infineon’s position during the upswing- phase of the semiconductor market,” commented Mr. Kley. 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 (Prime Standard); Freiverkehr in Berlin- Bremen, Düsseldorf, Hamburg, Hannover, München und Stuttgart; NYSE 211211 Apr 04