Infineon Technologies AG

Earnings Release • Apr 27, 2007

News Details

Corporate | 27 April 2007 07:30

Infineon reports results for the fiscal second quarter 2007 and provides outlook for the fiscal third quarter 2007

Infineon Technologies AG / Quarter Results

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Infineon reports results for the fiscal second quarter 2007 and provides
outlook for the fiscal third quarter 2007

FISCAL SECOND QUARTER 2007 RESULTS (January 1 to March 31, 2007)

in Euro million Q2 FY07 Q1 FY07 +/-
Revenues Infineon excluding Qimonda 978 958 2%
Revenues Qimonda 984 1,173 -16%
Revenues Infineon Group 1,962 2,131 -8%
EBIT Infineon excluding Qimonda (28) (9) ---
EBIT Qimonda 77 225 -66%
EBIT Infineon Group 49 216 -77%
Net income (loss) Infineon Group (11) 120 ---
Basic earnings (loss) per share (in Euro) (0.01) 0.16 ---
Diluted earnings (loss) per share (in Euro) (0.01) 0.15 ---

Munich, Germany, April 27, 2007. Infineon today reported results for the
second quarter and first half of fiscal 2007. Revenues were Euro 1.96
billion, down eight percent compared to the fiscal first quarter. Revenues
of Infineon excluding Qimonda increased to Euro 978 million from Euro 958
million in the prior quarter. In the Automotive, Industrial & Multimarket
segment revenues were with Euro 741 million the highest so far and better
than originally anticipated. As expected, revenues in the Communication
Solutions segment remained substantially unchanged compared to the prior
quarter.

Infineon group net loss was Euro 11 million in the fiscal second quarter
2007 compared to a net income of Euro 120 million in the prior quarter.
This resulted in basic and diluted loss per share of Euro 0.01 compared to
diluted earnings per share of Euro 0.15 in the prior quarter.

Infineon group EBIT decreased to Euro 49 million in the fiscal second
quarter 2007, down from Euro 216 million in the prior quarter. Infineon
excluding Qimonda experienced an EBIT loss of Euro 28 million in the
quarter. EBIT loss included charges of Euro 54 million. These charges
primarily consist of restructuring charges of approximately Euro 20 million
for planned downsizings mainly in the Essonnes, France (ALTIS)
manufacturing facility and in the company’s baseband business after the
BenQ insolvency as well as an asset write-down of Euro 35 million. Those
charges were offset in part by gains from asset disposals and a revision to
accrued personnel cost totaling Euro 25 million. Net charges in the prior
quarter were insignificant.

'We are satisfied with the direction but not with the absolute level of the
business performance from Infineon excluding Qimonda during the fiscal
second quarter. We expect to improve upon this level in the current quarter
as the ramp-up of platform shipments in Communication Solutions, coupled
with ongoing traction in Automotive, Industrial & Multimarket, should lead
to improved EBIT before charges for Infineon excluding Qimonda,' said Dr.
Wolfgang Ziebart, President and CEO of Infineon Technologies AG. 'Longer
term, we are planning for this trend to continue. For Infineon excluding
Qimonda, we are targeting at least break-even EBIT in fiscal 2007 and are
aiming for ten percent EBIT margin in fiscal 2009. In fiscal 2008, we
expect to be well on our way toward this goal.'

OUTLOOK FOR THE FISCAL THIRD QUARTER 2007
In the fiscal third quarter 2007, Infineon expects revenues for its
segments excluding Qimonda to increase, driven mainly by the Communication
Solutions segment. EBIT for the businesses excluding Qimonda and before
charges is expected to improve as well, mainly due to lower expected losses
in the Communication Solutions segment. Charges in the fiscal third quarter
2007 are expected to be insignificant.

Automotive, Industrial & Multimarket (AIM): In the fiscal third quarter
2007, Infineon expects revenues of its Automotive, Industrial & Multimarket
segment at least to remain at the high level of the prior quarter. The
company expects EBIT developing in-line with the revenue development.
Infineon anticipates that revenues and EBIT in its automotive business will
be slightly up compared to the fiscal second quarter. Results in its
industrial & multimarket business are expected to remain broadly on the
same level as in the previous quarter, whereas some further postponement of
demand for hard-disk-drives is expected to negatively impact the security &
ASIC business.

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

Qimonda: Qimonda expects its bit production to grow by 8 to 12 percent in
the fiscal third quarter 2007, mainly based on additional capacities from
the 300-millimeter line in Richmond, USA, and the Joint Venture Inotera,
Taiwan, as well as continued productivity improvements as a result of the
conversion of more capacities to 80-nanometer technology and below. The
company expects its share of bit-shipments to non-PC applications to be
more than 50 percent for the fiscal third quarter and expects the trend of
stronger demand for PC-related products to continue.

Other Operating Segments and Corporate and Eliminations: In the fiscal
third quarter 2007, Infineon expects revenues and EBIT in Other Operating
Segments and Corporate and Eliminations before charges to remain broadly
unchanged relative to the previous quarter. Charges in the fiscal third
quarter 2007 are expected to be insignificant.

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 April 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 fiscal second quarter 2007. 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.

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

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 and Qimonda’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 27.04.2007

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
www: www.infineon.com
ISIN: DE0006231004
WKN: 623100
Indices: DAX
Listed: Amtlicher Markt in Frankfurt (Prime Standard); Freiverkehr in
Berlin-Bremen, Hannover, München, Hamburg, Düsseldorf,
Stuttgart; Terminbörse EUREX; Foreign Exchange(s) NYSE

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