Infineon Technologies AG

Earnings Release • Jul 27, 2007

News Details

Corporate | 27 July 2007 07:31

Infineon reports results for the third quarter of the 2007 fiscal year and provides outlook for the fourth quarter of the 2007 fiscal year

Infineon Technologies AG / Quarter Results

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Infineon reports results for the third quarter of the 2007 fiscal year and
provides outlook for the fourth quarter of the 2007 fiscal year

FISCAL THIRD QUARTER 2007 RESULTS (April 1 to June 30, 2007)

in Euro million Q3 FY07 Q2 FY07 +/-
Revenues Infineon excluding Qimonda 1,011 978 3%
Revenues Qimonda 740 984 -25%
Revenues Infineon Group 1,751 1,962 -11%
EBIT Infineon excluding Qimonda 13 (28) +++
EBIT Qimonda (293) 77 ---
EBIT Infineon Group (280) 49 ---
Net loss Infineon Group (197) (11) ---
Basic and diluted loss per share (in Euro) (0.26) (0.01) ---

Neubiberg, Germany, July 27, 2007. Infineon today reported results for the
third quarter of the 2007 fiscal year. Revenues of the Infineon group were
Euro 1.75 billion, down 11 percent compared to the second quarter. Revenues
of Infineon excluding Qimonda increased to Euro 1.01 billion from Euro 978
million in the prior quarter. The Automotive, Industrial & Multimarket
segment reported revenues of Euro 752 million, representing a two percent
increase over the prior quarter. Revenues in the Communication Solutions
segment were Euro 259 million, a nine percent increase compared to the
prior quarter.

The Infineon group net loss was Euro 197 million in the third quarter,
resulting in basic and diluted loss per share of Euro 0.26, compared with a
net loss of Euro 11 million and basic and diluted loss per share of Euro
0.01 in the second quarter.

The Infineon group reported EBIT of negative Euro 280 million in the third
quarter, down from Euro 49 million in the prior quarter. Infineon excluding
Qimonda reported EBIT of Euro 13 million in the third quarter, up from
negative Euro 28 million in the second quarter. EBIT in the third quarter
included charges of Euro 20 million, for restructuring measures in
manufacturing facilities and further streamlining of the company’s research
& development locations, largely offset by a gain of Euro 17 million
related to the sale of the company’s POF business. In the prior quarter,
EBIT included charges of Euro 54 million, mainly for restructuring and an
asset write-down, partially offset by gains totaling Euro 25 million
related to asset disposals and a revision to accrued personnel cost.

'With positive EBIT and an improved EBIT margin in the third quarter,
Infineon excluding Qimonda made further progress towards sustainable
profitability. The recently announced acquisition in the area of DSL
Customer Premises Equipment marks the first selective strengthening of our
core businesses since the carve-out of Qimonda', said Dr. Wolfgang Ziebart,
President and CEO of Infineon Technologies AG. 'Going forward, we aim for
further improvements in our EBIT margin and we will continue to strengthen
our core businesses.'

OUTLOOK FOR THE FOURTH QUARTER OF THE 2007 FISCAL YEAR
For the fourth quarter of the 2007 fiscal year, Infineon expects revenues
for its segments excluding Qimonda to increase further, driven mainly by
the Communication Solutions segment and to a lesser extent by the
Automotive, Industrial & Multimarket segment. The company expects further
strong growth in EBIT with improving EBIT margin. Net charges are expected
to be insignificant in the fourth quarter.

Automotive, Industrial & Multimarket (AIM): In the fourth quarter of the
2007 fiscal year, Infineon expects the revenues of its Automotive,
Industrial & Multimarket segment to increase compared to the third quarter.
The company expects improved EBIT performance in the segment’s ongoing
operations, excluding the effect of the gain in the third quarter from the
sale of the POF business. The EBIT margin is expected to be close to ten
percent. Results in the segment’s automotive business are expected to
remain broadly on the same level as in the third quarter. The industrial &
multimarket business is expected to post higher revenues and EBIT, mainly
due to improved demand in the consumer and computer markets. The security &
ASIC business is expected to be negatively impacted by continued weak
demand for hard-disk-drives, despite further good business development in
the chip card and security business.

Communication Solutions (COM): In the fourth quarter of the 2007 fiscal
year, Infineon expects revenues of the Communication Solutions segment to
increase strongly compared to the third quarter, mainly driven by continued
increases in mobile phone platform shipments due to scheduled production
ramp-ups. In the broadband access business, revenues are anticipated to
remain stable. The Communication Solutions segment’s EBIT is also
anticipated to improve considerably, driven by the revenue increase. The
company continues to target break-even EBIT for its wireless business for
the fourth quarter of the 2007 calendar year.

Qimonda: Qimonda expects its bit production to grow by 15 to 20 percent in
the fourth quarter of the 2007 fiscal year, mainly based on increased
in-house and partner capacities and continued productivity improvements
from the ongoing conversion to 80 nanometer and 75 nanometer technologies.
Qimonda targets a share of bit-shipments to non-PC applications of around
50 percent for the fourth quarter, and expects the trend of strong demand
for PC-related products in particular to continue.

Other Operating Segments and Corporate and Eliminations: In the fourth
quarter, Infineon expects revenues and EBIT in Other Operating Segments and
Corporate and Eliminations to remain broadly unchanged prior to inclusion
of net charges. Net charges are expected to be insignificant in the fourth
quarter.

GROUP TAX POSITION: With the Corporate Tax Reform Act 2008 likely to be
enacted in Germany in the fourth quarter of the 2007 fiscal year, Infineon
will have to revalue the deferred tax positions on its balance sheet
relating to its German operations. The resulting devaluation of deferred
tax assets would lead to an income tax charge in the fourth quarter.

All figures are preliminary and unaudited.

ANALYST AND PRESS TELEPHONE CONFERENCES
Infineon Technologies AG will conduct a telephone conference (in English
only) with analysts and investors on July 27, 2007, at 10:00 a.m. Central
European Summer Time (CEST), 4:00 a.m. Eastern Daylight Time (U.S. EDT), to
discuss operating performance during the third quarter of the 2007 fiscal
year. In addition, the Infineon Management Board will host a telephone
conference with the media at 11:30 a.m. (CEST), 5:30 a.m. (U.S. EDT). It
can be followed in German and English over the Internet. Both conference
calls will be available live and for download on the Infineon web site at
http://www.infineon.com.

Additional major business highlights of Infineon’s segments in the third
quarter of the 2007 fiscal year can be found in the quarterly information
at http://www.infineon.com.

IFX FINANCIAL AND TRADE FAIR CALENDAR (*preliminary date)

• Nov 14, 2007*: Earnings Release for the Fourth Quarter and Full 2007
  Fiscal Year

• Jan 28, 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

• 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

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

DGAP 27.07.2007

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: Amtlicher Markt in Frankfurt (Prime Standard); Freiverkehr in
Berlin, Hannover, München, Hamburg, Düsseldorf, Stuttgart;
Terminbörse EUREX; Foreign Exchange(s) NYSE

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