Infineon Technologies AG

Earnings Release • Nov 14, 2007

News Details

Corporate | 14 November 2007 07:31

Infineon reports results for the fourth quarter and the 2007 financial year and provides outlook for the first quarter of the 2008 financial year

Infineon Technologies AG / Quarter Results

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Infineon reports results for the fourth quarter and the 2007 financial year
and provides outlook for the first quarter of the 2008 financial year

FOURTH QUARTER 2007 RESULTS (July 1 to September 30, 2007)

in Euro million Q4 FY07 Q3 FY07 +/-
Revenues Infineon excluding Qimonda 1,127 1,011 11%
Revenues Qimonda 711 740 (4%)
Revenues Infineon Group 1,838 1,751 5%
EBIT Infineon excluding Qimonda (25) 13 ---
EBIT Qimonda (216) (293) 26%
EBIT Infineon Group (241) (280) 14%
Net loss Infineon Group (280) (197) (42%)
Basic and diluted loss per share (in Euro) (0.37) (0.26) (42%)

Munich, Germany, November 14, 2007. Infineon today reported results for the
fourth quarter, ended September 30, and for the full 2007 fiscal year.

Revenues for Infineon excluding Qimonda in the fourth quarter of the 2007
fiscal year were Euro 1.13 billion, up 11 percent sequentially, reflecting
increases in both the Automotive, Industrial & Multimarket and the
Communication Solutions segment.
EBIT for Infineon excluding Qimonda was negative Euro 25 million in the
fourth quarter, down from positive Euro 13 million in the prior quarter.
Fourth quarter EBIT included net charges of Euro 94 million, mainly
relating to the sale of Qimonda shares. EBIT in the third quarter included
net charges of Euro 3 million. Excluding these charges, EBIT improved to
Euro 69 million in the fourth quarter, up from Euro 16 million in the third
quarter.

The Automotive, Industrial & Multimarket segment reported record revenues
of Euro 814 million, representing an eight percent increase compared to the
prior quarter. Segment EBIT increased to Euro 98 million from Euro 81
million in the prior quarter. Third quarter segment EBIT included a gain of
Euro 17 million related to the sale of the company’s POF business.

Revenues in the Communication Solutions segment were Euro 318 million, a 23
percent increase compared to the prior quarter. This included a high-teens
million Euro contribution from the DSL CPE activities acquired from Texas
Instruments. Segment EBIT for the fourth quarter improved to negative Euro
16 million, compared to negative Euro 34 million in the third quarter.

In the fourth quarter, the Infineon group reported revenues of Euro 1.84
billion, net loss of Euro 280 million, EBIT of negative Euro 241 million,
and basic and diluted loss per share of Euro 0.37. Included in the group
net loss were charges of Euro 53 million relating to the write-down of
deferred tax assets in connection with the adoption of the German Corporate
Tax Reform Act 2008.

2007 FINANCIAL YEAR RESULTS

in Euro million FY07 FY06 +/-
Revenues Infineon excluding Qimonda 4,074 4,114 (1%)
Revenues Qimonda 3,608 3,815 (5%)
Revenues Infineon Group 7,682 7,929 (3%)
EBIT Infineon excluding Qimonda (49) (217) 77%
EBIT Qimonda (207) 202 ---
EBIT Infineon Group (256) (15) ---
Net loss Infineon Group (368) (268) (37%)
Basic and diluted loss per share (in Euro) (0.49) (0.36) (37%)

Revenues in the full 2007 fiscal year for Infineon excluding Qimonda were
Euro 4.07 billion compared to Euro 4.11 billion in the previous year. EBIT
for Infineon excluding Qimonda was negative Euro 49 million in the 2007
fiscal year, compared to EBIT of negative Euro 217 million in 2006. EBIT in
the 2007 fiscal year included net charges of Euro 128 million compared to
net charges of Euro 199 million in the previous year. Excluding these
charges, EBIT improved to a profit of Euro 79 million for the 2007 fiscal
year, up from negative Euro 18 million in the 2006 fiscal year.

Group revenues in the 2007 fiscal year were Euro 7.68 billion, down three
percent year-on-year. Group net loss for the 2007 fiscal year amounted to
Euro 368 million, compared to a net loss of Euro 268 million in the 2006
fiscal year. Group EBIT was negative Euro 256 million in the 2007 fiscal
year, compared to EBIT of negative Euro 15 million in the prior year. Basic
and diluted loss per share amounted to Euro 0.49 in the 2007 fiscal year,
down from basic and diluted loss per share of Euro 0.36 in the 2006 fiscal
year.

'We have improved EBIT and EBIT margin for Infineon excluding Qimonda and
excluding charges throughout the 2007 fiscal year. EBIT in the
Communication Solutions segment improved each quarter as we executed on our
turn-around. The Automotive, Industrial & Multimarket segment also posted
improved EBIT in each quarter of the 2007 fiscal year, with record revenues
and EBIT in the fourth quarter', said Dr. Wolfgang Ziebart, President and
CEO of Infineon Technologies AG. 'We expect to improve EBIT excluding
charges for Infineon excluding Qimonda significantly in the 2008 fiscal
year compared to the previous year and to make a significant step towards
our fiscal 2009 goal of ten percent EBIT margin. We expect to meet our
turn-around goal in wireless with break-even EBIT in the current quarter.
We also anticipate that our recent acquisitions of the DSL business of
Texas Instruments and the mobile phone business of LSI will contribute to
our growth.'

OUTLOOK FOR THE FIRST QUARTER OF THE 2008 FINANCIAL YEAR
For the first quarter of the 2008 fiscal year, Infineon expects revenues
for its segments excluding Qimonda, and including the mobile phone business
recently acquired from LSI, to be about flat compared to the last quarter.
The company anticipates EBIT for its businesses excluding Qimonda and
excluding charges to decrease from last quarter’s level.
In the first quarter, Infineon expects to book a low double-digit million
Euro gain from the sale of a stake in its high-power bipolar activities.
Antitrust approval for this transaction is still pending. In addition,
Infineon expects to include a low double-digit million Euro write-down of
acquired in-process research & development relating to the mobile phone
business recently acquired from LSI.

Automotive, Industrial & Multimarket (AIM): In the first quarter of the
2008 fiscal year, Infineon expects the revenues of its Automotive,
Industrial & Multimarket segment to decline by a high single-digit
percentage compared to the prior quarter, mainly due to the usual seasonal
pattern, the weak U.S. dollar, the deconsolidation of the high-power
bipolar business, and to a lesser extent annual price reductions for major
customers. Segment EBIT prior to inclusion of a low double-digit million
Euro gain from the sale of a stake in the high-power bipolar activities is
expected to follow the revenue decline. Revenues in the segment’s
automotive business are expected to remain broadly unchanged from the
previous quarter despite annual price reductions for major customers.
Revenues in the industrial & multimarket business are anticipated to
decline due to seasonal weakness in the consumer, computing and telecom
markets, the weak US dollar, and the deconsolidation of the high-power
bipolar business. Results in the security & ASICs business are anticipated
to decrease as some normalization in the chip card and security business is
to be expected after the exceptionally high demand levels of the prior
quarter.

Communication Solutions (COM): Revenues in the Communication Solutions
segment are expected to grow significantly in the first quarter of the 2008
fiscal year compared to the prior quarter. This is expected to be driven by
the full-quarter inclusion of the DSL CPE business acquired from Texas
Instruments, by the consolidation of the mobile phone business recently
acquired from LSI, and by continued growth in shipments of mobile phone
platform solutions. Segment EBIT as well as EBIT for the wireless business
are anticipated to be about break-even prior to inclusion of a low
double-digit million Euro charge for the write-down of acquired in-process
research & development in connection with the acquisition of the mobile
phone business of LSI, which Infineon expects to book in the first quarter
of the 2008 fiscal year.

Qimonda: In the first quarter of the 2008 fiscal year, Qimonda expects its
bit production to grow approximately 5 percent quarter over quarter, mainly
based on productivity improvements from the ongoing conversion to 80
nanometer and 75 nanometer technologies, and including the effects of
reducing 200 millimeter capacities.

Other Operating Segments and Corporate and Eliminations: In the first
quarter, Infineon expects revenues and EBIT in Other Operating Segments and
Corporate and Eliminations to remain broadly unchanged compared to last
quarter’s EBIT prior to inclusion of the charges mentioned above.

All figures in this quarterly information are preliminary and unaudited.

ANALYST TELEPHONE AND PRESS CONFERENCES
Infineon Technologies AG will conduct a telephone conference (in English
only) with analysts and investors on November 14, 2007, at 10:00 a.m.
Central European Time (CET), 4:00 a.m. Eastern Standard Time (U.S. EST), to
discuss operating performance during the fourth quarter of the 2007 fiscal
year. In addition, the Infineon Management Board will host a press
conference with the media at 11:30 a.m. (CET), 5:30 a.m. (U.S. EST). It can
be followed in German and English over the Internet. Both conferences will
be available live and for download on the Infineon web site at
www.infineon.com.

Segments’ 2007 fourth quarter performance and additional major business
highlights can be found in the quarterly information at
http://www.infineon.com.

IFX FINANCIAL AND TRADE FAIR CALENDAR (*preliminary date)
- Feb 7, 2008* Earnings Release for the First Quarter of the 2008 Fiscal
Year
- Feb 12, 2008* Analyst Presentation at the Mobile World Congress in
Barcelona
- Feb 14, 2008* Annual General Meeting of Shareholders
- Apr 23, 2008* Earnings Release for the Second Quarter of the 2008
Fiscal Year
- Jun 2/3, 2008* IFX Day: Annual Analyst and Investor Day
- Jul 25, 2008* Earnings Release for the Third Quarter of the 2008
Fiscal Year
- Dec 03, 2008* Earnings Release for the Fourth Quarter and Full 2008
Fiscal Year

New in the IFX podcast section at www.infineon.com/podcast
- Silicon Microphone
- Infineon develops a new and energy efficient transistor technology
- High-definition sound using Voice over IP (VoIP)
- Voice over IP -- a Myth or a piece of cake?

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 in the world semiconductor market, including 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 continuing
transitioning of our production processes to smaller structure sizes, 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, and the continued development
of the business of Qimonda as a stand-alone entity and any future corporate
financing measures Infineon or Qimonda may undertake. 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, the outcome of antitrust
investigations and litigation matters, as well as the other factors
mentioned herein and those described in the 'Risk Factors' section of the
annual report of Infineon on Form 20-F filed with the U.S. Securities and
Exchange Commission on November 30, 2006. As a result, our actual results
could differ materially from those contained in the forward-looking
statements. Infineon does not intend or assume any obligation to update or
revise these forward-looking statements in light of developments which
differ from those anticipated.

Contact:
Investor Relations, Tel.: +49 89 234-26655, Fax: +49 89 234-9552987

14.11.2007 Financial News transmitted by DGAP

Language: English
Issuer: 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
Indices: DAX
Listed: Regulierter Markt in Frankfurt (Prime Standard); Freiverkehr
in Berlin, Hannover, München, Hamburg, Düsseldorf, Stuttgart;
Terminbörse EUREX; Foreign Exchange(s) NYSE

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