Infineon Technologies AG

Earnings Release • Jan 29, 2010

News Details

Corporate | 29 January 2010 07:30

Infineon reports results for the first quarter and provides outlook for the second quarter of the 2010 fiscal year

Infineon Technologies AG / Quarter Results

29.01.2010

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INFINEON REPORTS STRONG FIRST QUARTER RESULTS WITH SEGMENT RESULT MARGIN OF
9.4 PERCENT

NEW OUTLOOK FOR FISCAL YEAR 2010: REVENUE GROWTH IN EXCESS OF 20 PERCENT
WITH HIGH SINGLE-DIGIT MARGIN

FIRST QUARTER 2010 RESULTS (October 1 to December 31, 2009)

in Euro million Q1 FY10 Q4 FY09 +/-
Revenues 941 855 10%
Combined Segment Result 88 52 69%
Income (loss) from continuing operations (46) 24 - -
Income (loss) from discontinued operations, net 112 (10) + +
of tax
Net income (loss) 66 14 + +

in Euro
Basic and diluted earnings (loss) per share from (0.04) 0.03 - -
continuing operations
Basic and diluted earnings (loss) per share from 0.10 (0.01) + +
discontinued operations
Basic and diluted earnings (loss) per share 0.06 0.02 + +

Neubiberg, Germany - January 29, 2010 - Infineon Technologies AG (FSE: IFX
/ OTCQX: IFNNY) today reported results for the first quarter of the 2010
fiscal year, ended December 31, 2009.

Infineon's revenues in the first quarter were Euro 941 million, a strong
increase of 10 percent compared to the fourth quarter of the 2009 fiscal
year and of 27 percent year-over-year. Infineon's first quarter combined
Segment Result was Euro 88 million, a significant improvement compared to
Euro 52 million in the prior quarter. Net income for the first quarter was
Euro 66 million compared to Euro 14 million in the prior quarter.

OUTLOOK FOR THE SECOND QUARTER AND THE FULL 2010 FISCAL YEAR
For the second quarter of the 2010 fiscal year, Infineon expects revenues
to be approximately on the same level or, due to seasonality, down slightly
compared to the first quarter. Second quarter combined Segment Result
margin should be a high single-digit percentage.

For the 2010 fiscal year as a whole, Infineon is raising its guidance and
is now anticipating growth in revenues in excess of 20 percent compared
with the 2009 fiscal year, with a high single-digit combined Segment Result
margin.

'Thanks to leadership positions in our target markets, we translated the
general economic recovery into operating results for the first quarter
which exceeded our original expectations. The Automotive and Industrial &
Multimarket segments benefited strongly from the market upswing', said
Peter Bauer, CEO of Infineon Technologies AG. 'Although uncertainties in
the worldwide economy remain regarding developments in the second half of
this fiscal year, we are raising our guidance for the full 2010 fiscal
year. We are now looking for revenue growth in excess of 20 percent with a
high single-digit combined Segment Result margin.' Previously, the company
expected revenue growth of ten percent or more with mid single-digit
combined Segment Result margin.

The sequential increase in revenues of ten percent in the first quarter
reflects growth in the company's Automotive (ATV), Industrial & Multimarket
(IMM) and Wireless Solutions (WLS) segments, mostly driven by the economic
recovery and improved demand in the supply chain as well as at end
customers.

First quarter combined Segment Result of Euro 88 million was up
significantly compared to Euro 52 million in the fourth quarter of the 2009
fiscal year. Combined Segment Result margin in the first quarter was 9.4
percent, compared to 6.1 percent in the prior quarter. All of the company's
four operating segments achieved positive Segment Result. The increase in
combined Segment Result reflected higher sales levels and continued
increases in factory loading compared to the prior quarter. This more than
offset the increase in operating expenses due to the termination of
temporary labor cost reduction measures (short-time work and unpaid leave)
and the negative impact of the U.S. dollar against the Euro.

For the first quarter, the loss from continuing operations was Euro 46
million. This amount included a non-recurring operating charge of Euro 81
million in connection with the deconsolidation of ALTIS, the company's
joint venture with IBM in France, as described below. For the fourth
quarter of the 2009 fiscal year, income from continuing operations was Euro
24 million.

Infineon reported income from discontinued operations, net of income taxes,
of Euro 112 million for the first quarter. This amount consisted mainly of
an after tax gain of Euro 106 million from the sale of the Wireline
Communications (WLC) business to Lantiq, affiliates of Golden Gate Private
Equity Inc., as well as the results of the operating WLC business before
the closing of the sale of that business.

Net income was Euro 66 million in the first quarter, a strong improvement
from the net income of Euro 14 million in the prior quarter. Included in
this amount was an after tax gain of Euro 106 million from the sale of the
WLC business to Lantiq, which more than offset the non-recurring operating
charge of Euro 81 million in connection with the deconsolidation of ALTIS.
Basic and diluted earnings per share were Euro 0.06 for the first quarter
compared to basic and diluted earnings per share of Euro 0.02 for the
fourth quarter of the 2009 fiscal year.

At the end of the first quarter, Infineon's gross cash position was Euro
1,678 million compared to Euro 1,507 million at the end of the fourth
quarter of the 2009 fiscal year. The increase of Euro 171 million included
a cash inflow of Euro 223 million in connection with the sale of the WLC
business to Lantiq, partly offset by the deconsolidation of the cash of the
ALTIS joint venture in the amount of Euro 88 million. During the first
quarter, voluntary repurchases of a portion of the company's subordinated
convertible notes due 2010 were made, totaling Euro 46 million at book
value, as well as a repayment of other debt, totaling Euro 10 million.
Overall, the company's net cash position increased to Euro 874 million as
of December 31, 2009, compared to Euro 657 million as of September 30,
2009.

Free cash flow from continuing operations for the first quarter was Euro 14
million. This amount included a reduction in cash of Euro 88 million
resulting from the deconsolida-tion of the ALTIS joint venture. In the
fourth quarter of the 2009 fiscal year, free cash flow from continuing
operations was Euro 151 million. Capital expenditures, including
capitalized intangible assets, were Euro 48 million in the first quarter, a
slight increase compared to Euro 40 million in the prior quarter.
Depreciation and amortization was Euro 106 million, compared to Euro 114
million in the prior quarter.

ALTIS
In December 2009, Infineon deconsolidated its joint venture ALTIS, after
the waiving of its option to acquire shares in ALTIS from its joint venture
partner IBM. In connection with the deconsolidation, Infineon recorded a
non-recurring operating charge of Euro 81 million in its non-segment
result. The investment in ALTIS is accounted for as an equity investment
from December 31, 2009.

OUTLOOK FOR THE SECOND QUARTER OF THE 2010 FISCAL YEAR
Infineon expects revenues for the second quarter of the 2010 fiscal year to
be approximately on the same level or, due to seasonality, down slightly
compared to the first quarter, resulting in another quarter with combined
Segment Result margin of a high single-digit percentage.

Revenues in the ATV, IMM, and Chip Card & Security (CCS) segments are
expected to increase compared to the first quarter. Revenues in the WLS
segment are likely to decrease due to the seasonal slow-down which is
typical after the Christmas season. This outlook is based on the assumption
of a U.S. dollar/Euro exchange rate of 1.50.

UPDATED OUTLOOK FOR THE 2010 FISCAL YEAR
Given strong first quarter results and second quarter outlook, Infineon is
raising its outlook for the 2010 fiscal year.

In light of the strong performance in the first half of the 2010 fiscal
year, and taking a conservative view regarding the sustainability of
current growth patterns in the second half of the current fiscal year,
Infineon now expects growth in revenues in excess of 20 percent for the
2010 fiscal year, at an assumed U.S. dollar/Euro exchange rate of 1.50. The
company still anticipates the year-over-year increase to be driven by
increases in revenues in all of the company's operating segments,
particularly in the ATV and IMM segments, with lower revenue growth
anticipated in the WLS segment, and the lowest growth rate expected in the
CCS segment. Revenues in Other Operating Segments, mainly from product
supply agreements with Lantiq, are now anticipated to total a low
triple-digit million Euro amount.

Infineon expects combined Segment Result in the 2010 fiscal year to improve
considerably from the 2009 fiscal year with combined Segment Result margin
now anticipated to be a high single-digit percentage.

Driven by the dynamic growth in revenue and production levels, Infineon
anticipates that CapEx, including capitalized intangible assets, will be at
the higher end of the previous guidance range of Euro 220 million to Euro
250 million for the 2010 fiscal year, compared to Euro 154 million in the
2009 fiscal year. As announced last quarter, depreciation and amortization
is expected to decrease to approximately Euro 400 million in the 2010
fiscal year compared to Euro 513 million in the 2009 fiscal year.

Infineon segments' performance in the first quarter of the 2010 fiscal year
can be found in the quarterly information at http://www.infineon.com.

All figures in this quarterly information 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, 2010, 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 first quarter of the 2010 fiscal
year. 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 conferences will
be available live and for download on the Infineon web site at
http://corporate.infineon.com.

IFX FINANCIAL AND TRADE FAIR CALENDAR (*preliminary date)
Feb 11, 2010 2010 Annual General Meeting of Shareholders
Feb 16, 2010 Analyst Presentation at the Mobile World Congress in Barcelona
Apr 29, 2010* Earnings Release for the Second Quarter of the 2010 Fiscal
Year
Jul 28, 2010* Earnings Release for the Third Quarter of the 2010 Fiscal
Year
Nov 16, 2010* Earnings Release for the Fourth Quarter and Full 2010 Fiscal
Year

D I S C L A I M E R
This press release includes forward-looking statements and assumptions
about the future of Infineon's business and the industry in which we
operate. These include statements and assumptions relating to general
economic conditions, future developments in the world semiconductor market,
our ability to manage our costs and to achieve our savings and growth
targets, the resolution of Qimonda's insolvency proceedings and the
liabilities we may face as a result of Qimonda's insolvency, the potential
disposition or closure of our ALTIS joint venture, the benefits of research
and development alliances and activities, our planned levels of future
investment, the introduction of new technology at our facilities, our
ability to continue to offer commercially viable products, and our expected
or projected future results.

These forward-looking statements are subject to a number of uncertainties,
including broader economic developments, including the sustainability of
recent improvements in the market environment; trends in demand and prices
for semiconductors generally and for our products in particular, as well as
for the end-products, such as automobiles and consumer electronics, that
incorporate our products; the success of our development efforts, both
alone and with partners; the success of our efforts to introduce new
production processes at our facilities; the actions of competitors; the
continued availability of adequate funds; the outcome of antitrust
investigations and litigation matters; and the outcome of Qimonda's
insolvency proceedings; as well as the other factors mentioned in this
press release and those described in the 'Risk Factors' section of our most
recent annual report on Form 20-F on file with the with the U.S. Securities
and Exchange Commission.

As a result, Infineon's actual results could differ materially from those
contained in these forward-looking statements. You are cautioned not to
place undue reliance on these forward-looking statements. Infineon does not
undertake any obligation to publicly update or revise any forward-looking
statements in light of developments which differ from those
anticipated.

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

29.01.2010 Ad hoc announcement, Financial News and Media Release distributed by DGAP.
Media archive at www.dgap-medientreff.de and www.dgap.de

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Language: English
Company: 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, Düsseldorf, München, Hannover, Stuttgart, Hamburg;
Terminbörse EUREX

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