Infineon Technologies AG

Earnings Release • Jan 29, 2007

News Details

Corporate | 29 January 2007 07:30

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

Infineon Technologies AG / Quarter Results

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

FISCAL FIRST QUARTER 2007 RESULTS (October 1 to December 31,
2006)

in Euro million Q1 FY07 Q4 FY06 +/-
Revenues Infineon excluding
Qimonda 958 1,058 -9%
Revenues Qimonda 1,173 1,232 -5%
Revenues Infineon Group 2,131 2,290 -7%
EBIT Infineon excluding Qimonda (9) (174) 95%
EBIT Qimonda 225 204 10%
EBIT Infineon Group 216 30 +++
Net income (loss) Infineon 120 (36) +++
Group
Basic earnings (loss) per share 0.16 (0.05) +++
(in Euro)
Diluted income (loss) per share 0.15 (0.05) +++
(in Euro)

Munich, Germany, January 29, 2007. Infineon today reported results for the
fiscal first quarter 2007. Revenues were Euro 2.13 billion, down seven
percent compared to the fiscal fourth quarter 2006. Revenues of Infineon
excluding Qimonda decreased to Euro 958 million from Euro 1.06 billion in
the prior quarter. As expected, revenues in both the Communication
Solutions and the Automotive, Industrial & Multimarket segments declined.

Infineon group net income was Euro 120 million in the fiscal first quarter
2007 compared to a net loss of Euro 36 million in the prior quarter. This
resulted in diluted earnings per share of Euro 0.15 compared to a basic and
diluted loss per share of 0.05 Euro in the prior quarter.

The Infineon group EBIT increased to Euro 216 million in the fiscal first
quarter 2007, up from Euro 30 million in the prior quarter. Infineon
excluding Qimonda experienced an EBIT loss of Euro 9 million in the
quarter. Net charges in the fiscal first quarter 2007 were insignificant.
EBIT loss for Infineon excluding Qimonda was Euro 174 million in the prior
quarter, including charges of Euro 164 million, mainly resulting from the
IPO of Qimonda and the insolvency of BenQ Mobile’s German subsidiary.
Before these charges, the fourth quarter 2006 EBIT loss excluding Qimonda
would have been Euro 11 million.

'In a challenging operating environment, results for the first quarter came
out better than originally expected. For Infineon excluding Qimonda, EBIT
remained substantially flat, before charges, despite the sales decline
relative to the prior quarter. In a mixed market environment, we should
return to revenue growth in Automotive, Industrial & Multimarket in the
current quarter and see strong design-win momentum in Communication
Solutions, in particular in the baseband business,' said Dr. Wolfgang
Ziebart, CEO and President of Infineon Technologies AG. 'This lets us look
to the coming quarters with full confidence.'

OUTLOOK FOR THE FISCAL SECOND QUARTER 2007
In the fiscal second quarter 2007, Infineon expects revenues and EBIT for
its businesses excluding Qimonda, and prior to inclusion of charges, to
remain at least flat compared to the fiscal first quarter. The company
expects revenues and EBIT in the Automotive, Industrial & Multimarket
segment to increase compared to the prior quarter. In the Communication
Solutions and Corporate and Eliminations segments, revenues and EBIT before
charges are anticipated to remain broadly flat compared to the fiscal first
quarter. The company currently expects that charges in connection with the
restructuring of its baseband operations following the loss of business as
a result of the insolvency of BenQ Mobile’s German subsidiary will be
recorded in the second quarter, rather than the first quarter as originally
expected, and will be significantly lower than the Euro 30 million
originally anticipated.

Automotive, Industrial & Multimarket (AIM): In the fiscal second quarter
2007, Infineon expects a return to growth in its Automotive, Industrial &
Multimarket segment. The company foresees a slight increase in revenues
quarter-on-quarter and an improved EBIT margin. With improving seasonality,
the company anticipates that revenues in its automotive business will
increase compared to the fiscal first quarter, despite continued weakness
in the U.S. car market. Results in its industrial & multimarket and
security & ASIC businesses are expected to remain broadly on the same level
as in the previous quarter.

Communication Solutions (COM): In the fiscal second quarter 2007, Infineon
expects revenues and EBIT of the Communication Solutions segment to remain
broadly unchanged compared to the previous quarter. Continued customer
ramp-ups in the company’s mobile phone platform business are likely to
offset the typical seasonal decline in the wireless business. In the
broadband access business, revenues are anticipated to remain stable.
Implemented measures for cost reductions in the mobile platform business
are likely to contribute to EBIT improvements in the fiscal third quarter
2007.

Qimonda: Qimonda expects its bit production to grow between 8 to 12 percent
in the fiscal second quarter 2007. The company expects this bit growth to
be based on improved productivity as a result of the continued conversion
of capacities to 90nm technology and below. Qimonda also expects to
maintain its share of bit-shipments to non-PC applications significantly
above 50 percent in the next quarter.

Other Operating Segments and Corporate and Eliminations: In the fiscal
second 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. The company currently expects
that charges in connection with the restructuring of its baseband
operations following the insolvency of BenQ Mobile’s German subsidiary will
be recorded in the second quarter, rather than the first quarter as
originally expected. The company is still implementing measures aimed at
lowering the overall level of charges while maintaining the targeted
savings, and currently expects that these charges will be significantly
lower than the Euro 30 million originally anticipated. The Corporate and
Eliminations segment will continue to reflect intra-group elimination of
sales between Infineon and Qimonda.

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 January 29, 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 fiscal first quarter 2007. In
addition, the Infineon Management Board will host a telephone 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 conference calls
will be available live and for download on the Infineon web site at
http://www.infineon.com.

Segments’ fiscal first 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 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 impact of our
carve-out of Qimonda, our memory products business, its initial public
offering, and any further sales of Qimonda shares or other corporate
financing measures in that regard. 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 29.01.2007

Language: English
Issuer: Infineon Technologies AG
Am Campeon 1-12
85579 Neubiberg/München 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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