Infineon Technologies AG

Earnings Release • Jan 19, 2004

News Details

Ad-hoc | 19 January 2004 07:30

Infineon Reports First Quarter Results for Fiscal Year 2004

Ad-hoc-announcement transmitted by DGAP. The issuer is solely responsible for the content of this announcement. ——————————————————————————– Infineon Reports First Quarter Results for Fiscal Year 2004 Infineon Technologies AG, the world’s sixth largest semiconductor manufacturer, today announced results for its first quarter in fiscal year 2004, ended December 31, 2003. Revenues of Euro 1.62 billion reflected a decrease of 8 percent sequentially, but an improvement of 13 percent on a year-on-year basis. The sequential revenue decrease was due mostly to continued price decline throughout all business segments, as well as the negative impact of the weakening US-dollar exchange rate. Net income amounted to Euro 34 million, compared to net income of Euro 49 million in the previous quarter and a net loss of Euro 40 million year-on-year. Quarterly EBIT was Euro 70 million versus Euro 67 million in the previous quarter and significantly improved from an EBIT loss of Euro 29 million in the first quarter of the last fiscal year. The sequential earnings performance reflected among other improved earnings in the Secure Mobile Solutions business group, as well as lower earnings from the Memory Products business group. Basic and diluted earnings per share for the first quarter of fiscal year 2004 were Euro 0.05, declining from Euro 0.07 per share in the previous quarter but improving from a loss per share of Euro 0.06 year-on-year. Infineon’s gross cash position remained at Euro 2.8 billion. The net cash position, representing the gross cash position less debt, increased to Euro 355 million from Euro 328 million at the end of the previous quarter. end of ad-hoc-announcement (c)DGAP 19.01.2004 Issuer’s information/explanatory remarks concerning this ad-hoc-announcement: Dr. Ulrich Schumacher, President and CEO of Infineon Technologies AG, commented: “Today, we announce profitability for the first quarter of this fiscal year. This good development is in line with our expectations and consistent with our business roadmap. We had positive results in three of our four business groups. Despite continued price decline and the weakening US-dollar, we made full use of productivity and cost advantages, and were thus still able to improve our EBIT.” OUTLOOK FOR FISCAL YEAR 2004 “All business indicators show that the semiconductor industry is finally in an upswing phase. The worst crisis ever experienced in the semiconductor market seems to be over,” commented Dr. Schumacher. “With the market back on track, we also see positive business development for the current fiscal year. All segments are expected to show stable growth in 2004.” Infineon expects good growth in the automotive segment despite strong continuing pricing pressure, reflecting the introduction of new car models with higher semiconductor content but only limited overall growth in worldwide automotive production. Even though the weakening US-dollar exchange rate will impact the business, Infineon anticipates a growth of its automotive and industrial business in fiscal year 2004 in line with the market. For the second quarter of fiscal year 2004, Infineon expects a return to growth in revenues in the wireline communications segment. Revenue growth could, however, be hampered by a further weakening US-dollar. For fiscal year 2004, the company sees solid growth for its Wireline Communications business group. In addition, Infineon is preparing strategic options for Fiber Optics by carving out the business into a separate legal entity. The company is in the process of evaluating potential strategic partners to maximize the value of the business. For the second quarter, Infineon expects a slight sequential decrease in revenues in the secure mobile solutions segment due to seasonally-reduced demand after Christmas, and continued phasing out of some cordless business. The company expects stable development of the wireless infrastructure and silicon discretes businesses. Infineon is confident that demand for security controllers will grow steadily until the end of fiscal year 2004, mainly as a result of major design wins at identification projects. The ongoing convergence of multimedia applications should also reinforce growth in the wireless business in the second half of fiscal year 2004. Historically, the beginning of the calendar year shows declining prices for memory products based on a reduced demand for PC units after the Christmas season. Infineon, expects its bit shipment to increase in the second quarter of fiscal year 2004. Main production growth for the rest of the fiscal year will be driven by the conversion of the company’s production process to 110-nanometer technology and the ramp-up of capacities at its foundry partners. The company expects demand to grow in 2004 as a result of corporate replacement of older equipment and the ramp-up of DDR2-based desktop PCs and servers. “While pricing pressure persists in most of our business segments, we see more tangible signs of a recovery in the semiconductor industry, particularly strongly increasing utilization rates in our own fabs and foundries and more aggressive booking behavior from our customers. Despite our cautious optimism, we will relentlessly continue to reduce costs, focus our product portfolio and become more flexible and faster than our competitors. Based on this effort, we are confident to again outgrow the market and improve our profitability relative to industry benchmarks,” commented Dr. Schumacher. TELEPHONE CONFERENCE INFORMATION Infineon Technologies will host a telephone conference with the media on January 19, 2004, 12:00 pm Central European Time (CET), 6:00 am Eastern Standard Time (U.S. EST). The call can be followed in German and English over the Internet. The telephone conference for analysts and investors (English only) will take place at 2:00 pm Central European Time (CET), 8:00 am Eastern Standard Time (U.S. EST), to discuss operating performance of the first quarter of fiscal year 2004. A broadcast of the 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 190730 Jän 04