Infineon Technologies AG / Quarter Results
03.12.2008
Release of a Corporate News, transmitted by DGAP - a company of EquityStory AG.
The issuer is solely responsible for the content of this announcement.
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Infineon reports results for the fourth quarter and the 2008 fiscal year
and provides outlook for the first quarter and the 2009 fiscal year
FOURTH QUARTER 2008 RESULTS (July 1 to September 30, 2008)<pre>
in Euro million Q4 FY08 Q3 FY08 +/-
Revenues 1,153 1,029 12%
Infineon EBIT (220) 71 ---
Income (loss) from continuing operations (244) 45 ---
Income (loss) from discontinued operations, net (519) (637) 19%
of tax
Net loss (763) (592) (29%)
in Euro
Basic and diluted earnings (loss) per share from (0.33) 0.06 ---
continuing operations
Basic and diluted earnings (loss) per share from (0.69) (0.85) 19%
discontinued operations
Basic and diluted loss per share (1.02) (0.79) (29%)</pre>
Neubiberg, Germany December 3, 2008 Infineon Technologies AG
(FSE/NYSE:IFX) today reported results for the fourth quarter, ended
September 30, and for the full 2008 fiscal year. Infineon presents its
results for the 2008 fiscal year and prior periods in accordance with U.S.
GAAP, and will begin reporting its financial results in accordance with
International Financial Reporting Standards for periods beginning October
1, 2008.
Infineons revenues in the fourth quarter of the 2008 fiscal year were Euro
1,153 million, up 12 percent sequentially and two percent year-over-year.
The sequential increase reflects an increase of revenues in both the
Communication Solutions and Automotive, Industrial & Multimarket segments.
Excluding effects of currency fluctuations, primarily between the U.S.
dollar and the Euro, and acquisitions and divestitures, revenues increased
ten percent sequentially and four percent year-over-year.
Infineon EBIT was negative Euro 220 million in the fourth quarter, down
from positive Euro 71 million in the prior quarter. Infineon EBIT in the
fourth quarter included net charges of Euro 253 million, mainly in
connection with the companys IFX10+ cost-reduction program. Infineon EBIT
in the fourth quarter also included Euro 6 million for the amortization of
acquisition-related intangible assets related mainly to the business
acquired from LSI Corporation (LSI). Infineon EBIT in the prior quarter
included a net gain of Euro 41 million, mainly in connection with the sale
of the Hard Disk Drive (HDD) business to LSI, and Euro 7 million in
amortization of such acquired intangible assets. For additional detail on
net gains and charges included in Infineon EBIT, please see the table on
page 13 in the quarterly information at http://www.infineon.com.
Infineons total Segment Profit was Euro 59 million under IFRS in the
fourth quarter. For further details and a reconciliation of Segment Profit
to 'operating income (loss)' in the condensed consolidated statements of
operations, please see the table on page 17 in the quarterly information.
Net loss from continuing operations for the fourth quarter was Euro 244
million, resulting in basic and diluted loss per share from continuing
operations of Euro 0.33. For the third quarter, net income from continuing
operations was Euro 45 million, and basic and diluted earnings per share
from continuing operations were Euro 0.06.
The net loss from discontinued operations was Euro 519 million for the
fourth quarter. Basic and diluted loss per share from discontinued
operations was Euro 0.69.
For the fourth quarter, Infineon reported group net loss of Euro 763
million, and basic and diluted loss per share of Euro 1.02.
The Automotive, Industrial & Multimarket segment reported in the fourth
quarter of the 2008 fiscal year revenues of Euro 767 million, up eight
percent sequentially and down six percent year-over-year. The sequential
increase was mainly due to the seasonal pattern in the companys industrial
business. Excluding the effects of currency fluctuations, primarily between
the U.S. dollar and the Euro, and acquisitions and divestitures, segment
revenues increased five percent sequentially and decreased one percent
year-over-year. Segment EBIT was Euro 47 million compared to Euro 106
million in the third quarter. Included in the segments EBIT for the fourth
quarter were net charges of Euro 25 million, primarily from impairments of
assets. Segment EBIT in the prior quarter included a net gain of Euro 43
million, primarily resulting from the sale of the HDD business to LSI.
In the Communication Solutions segment revenues in the fourth quarter of
the 2008 fiscal year were Euro 389 million, up 24 percent compared to the
prior quarter and up 22 percent year-over-year. The stronger than expected
sequential revenue increase was due to seasonal strength and better than
anticipated demand from an HSDPA customer. Excluding the effects of
currency fluctuations, primarily between the U.S. dollar and the Euro, and
the contributions from the mobile phone business acquired from LSI and the
DSL CPE activities acquired from Texas Instruments, segment revenues
increased 25 percent sequentially and 15 percent year-over-year. Segment
EBIT for the fourth quarter improved to negative Euro 3 million, up from
negative Euro 30 million in the prior quarter. Included in the fourth
quarter segment EBIT was a net gain of Euro 5 million, mainly in connection
with the sale of the BAW filter business to Avago in August 2008. Third
quarter segment EBIT did not include any significant net gains or charges.
Included in the segment EBIT for the fourth quarter was amortization of
acquired intangible assets of Euro 5 million relating mainly to the mobile
phone business acquired from LSI, compared to Euro 7 million for the third
quarter.
For results for the 2008 fiscal year, please see page 2 in the quarterly
information.
QIMONDA
In order to address the ongoing adverse market conditions in the memory
products industry and to better enable it to meet its current obligations
in the short term, Qimonda has intensively explored operational and
strategic alternatives to raise and conserve cash. In furtherance of these
goals, in October 2008 Qimonda announced a global restructuring and
cost-reduction program that is intended to reposition Qimonda in the market
and substantially increase its efficiencies through a wide-ranging
realignment of its business. As a part of this program, in the first
quarter of the 2009 fiscal year Qimonda sold its 35.6 percent interest in
Inotera Memories Inc. to Micron Technology, Inc. for U.S. dollar 400
million in cash. This transaction closed in November 2008. Qimonda has
announced that it intends to use the proceeds from this sale to fund its
operations in the short-term.
The net book value of the Qimonda disposal group in Infineons condensed
consolidated balance sheet as of September 30, 2008 has been recorded at
the estimated fair value less costs to sell of Qimonda. Under IFRS, upon
disposal of its interest in Qimonda, the company would also realize losses
related to unrecognized currency translation effects for the Qimonda
disposal group which are recorded in equity. As of September 30, 2008, the
amount of such losses recorded in shareholders equity under IFRS totalled
Euro 187 million.
Infineon continues to seek to dispose of its remaining interest in Qimonda.
There can be no assurance that Infineon will be successful in this regard,
or that Qimondas ongoing operational and strategic efforts will be
successful in generating adequate cash or result in desired operational
efficiencies and cash savings. In the event that Qimonda were to be unable
to meet its obligation, Infineon may be exposed to certain significant
liabilities related to the Qimonda business, including pending antitrust
and securities law claims, the potential repayment of governmental
subsidies received, and employee-related contingencies.
With the Qimonda shares trading at current price levels, Infineon believes
that the distribution of Qimonda shares by way of a dividend in kind to
Infineon shareholders is no longer practicable while, at the same time,
bearing administrative costs disproportionate to the value of the shares.
The company therefore is no longer considering a dividend in kind and
continues to focus its efforts on a transaction with a partner. There can
be no assurance that Infineons plan to further reduce its interest in
Qimonda will be successful or that Infineon will arrive at a minority
shareholding in Qimonda by about the time of the 2009 Annual General
Meeting.
In preparation for the ultimate disposal of Qimonda AG, Infineon has
reclassified the assets and liabilities of Qimonda as held for disposal in
its condensed consolidated balance sheets effective as of March 31, 2008.
With this decision, the individual line items in the condensed consolidated
statements of operations on page 11 in the quarterly release reflect
Infineons continuing operations without Qimonda. All results relating to
Qimonda are reported in the line item 'Income (loss) from discontinued
operations, net of tax'. Infineons beneficial ownership interest in
Qimonda as of September 30, 2008 was 77.5 percent.
ALTIS
In August 2007, Infineon and International Business Machines Corporation
signed an agreement to divest their respective shares in the joint venture
ALTIS, a manufacturing facility in Essonnes, France, via a sale to Advanced
Electronic Systems AG (AES). As of September 30, 2008, negotiations with
AES have not progressed as previously anticipated and could not be
completed. Despite the fact that negotiations are ongoing with an
additional party, the outcome of these negotiations is uncertain. As a
result, Infineon reclassified related assets and liabilities previously
classified as held-for-sale into held-and-used in the consolidated balance
sheet as of September 30, 2008, resulting in net charges of Euro 59
million.
INFINEONS COST-REDUCTION PROGRAM IFX10+
To address rising risks in the market environment and adverse currency
trends, Infineon implemented its IFX10+ cost-reduction program in the third
quarter of the 2008 fiscal year. In the fourth quarter, the company made
good progress in the areas defined under IFX10+. Over the course of the
fourth quarter, Infineon sold its Bulk Acoustic Wave ('BAW') filters
business to Avago and realized significant reductions in cost of materials
as well as improved processes in the manufacturing arena. In addition, the
company has reached agreements regarding or has already effected the
separation with respect to approximately three-quarters of the announced
workforce reduction by the end of October 2008. Under U.S. GAAP, a total of
Euro 166 million in expenses related to IFX10+ was incurred in the fourth
quarter of the 2008 fiscal year. In response to the dramatic weakening of
the global market since August 2008, the company has identified very
substantial additional savings, primarily in operating expenses, beyond the
originally announced annualized savings of at least Euro 200 million by the
end of the 2009 fiscal year. These additional savings, however, are likely
to be more than completely offset by the simultaneous decline in Infineons
revenue expectations versus original plans. The increase in idle cost
caused by the drop in capacity utilization of Infineons manufacturing
sites also contributes negatively. Infineon cannot rule out the possibility
of incurring additional expenses or recording additional charges in the
future in connection with IFX10+ or similar measures.
'Our achievements in the fourth quarter were satisfactory in light of the
extraordinary developments in the world economy and in our markets. We are,
however, concerned about the prospects for the quarters to come. The
financial crisis and economic slow-down have already impacted the worldwide
semiconductor market, which is reflected in significantly weakened demand
in all of our target markets', said Peter Bauer, CEO of Infineon
Technologies AG. 'With our IFX10+ program in place, we had begun to
optimize our business operations before the economic slow-down started.
During the downturn, we will focus on maintaining our excellent customer
relationships and product portfolio and on managing our cash flows smartly.
This will help to position us for improved competitiveness and rising
profitability when economic growth resumes.'
OUTLOOK FOR THE FIRST QUARTER OF THE 2009 FISCAL YEAR
The global financial crisis and general slow-down in the world economy are
having a severe impact on demand in all of Infineons target markets,
leading to a decrease in revenues in its five operating segments in the
first quarter of the 2009 fiscal year. The company expects revenues from
its continuing operations in the first quarter of the 2009 fiscal year to
decrease by approximately 30 percent compared to the prior quarter, mainly
driven by revenue decreases in the Automotive, Wireless Solutions, and
Industrial & Multimarket segments. Revenues in the Automotive and
Industrial & Multimarket segments are expected to decrease compared to the
fourth quarter of the 2008 fiscal year, reflecting a worsening global
recession, significant production cuts in the automotive markets worldwide,
inventory reductions throughout the supply chain, and a general global
weakening in demand. Revenues in the Wireless Solutions segment are
anticipated to be strongly negatively impacted by the weakening of global
demand and, in addition, by a reduction in demand at one specific customer.
Infineon anticipates that total Segment Profit under IFRS in the first
quarter of the 2009 fiscal year will decrease significantly compared to the
total Segment Profit of Euro 59 million under IFRS in the fourth quarter of
the 2008 fiscal year, mainly due to the sharp revenue decrease, low
capacity utilization and a final quarter of temporarily higher costs, as
shipments of DRAM wafers out of Infineons 200-millimeter wafer facility in
Dresden, Germany, to Qimonda have come to an end in the third quarter.
Total Segment Profit margin is expected to be a negative mid-to-high teens
percentage.
For further details and a reconciliation of Segment Profit to 'operating
income (loss)' in the condensed consolidated statements of operations,
please see the table on page 17 in the quarterly information.
OUTLOOK FOR THE 2009 FISCAL YEAR
For the 2009 fiscal year, visibility is very limited. Infineon believes
that a significant decline in global semiconductor revenues from 2008
levels cannot be ruled out. Based on the current forecast, the company
expects total revenues for Infineon in the 2009 fiscal year to decrease by
at least 15 percent compared to the 2008 fiscal year. The year-over-year
decrease is expected to be driven in particular by the Automotive segment.
In addition, significant revenue decreases are also anticipated in the
Industrial & Multimarket, Chip Card & Security, and Wireline Communications
segments due to the general global weakening in demand. The year-over year
decrease is expected to be least severe in the Wireless Solutions segment,
mainly due to ongoing gains in market share. In the Industrial &
Multimarket segment, revenues are anticipated to be impacted by the
disposal of the HDD business in the 2008 fiscal year.
The sharp decreases in revenue in combination with idle capacity costs
caused by low capacity utilization are expected to lead to a significant
decrease in Infineons total Segment Profit in the 2009 fiscal year
compared to total Segment Profit of Euro 258 million for the 2008 fiscal
year. The company expects total Segment Profit for the 2009 fiscal year to
be negative.
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 December 3, 2008, 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 2008 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
http://corporate.infineon.com.
Segments 2008 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 6, 2009* Earnings Release for the First Quarter of the 2009 Fiscal
Year
- Feb 12, 2009* 2009 Annual General Meeting of Shareholders
- Feb 17, 2009* Analyst Presentation at the Mobile World Congress in
Barcelona
- Apr 30, 2009* Earnings Release for the Second Quarter of the 2009 Fiscal
Year
- Jul 29, 2009* Earnings Release for the Third Quarter of the 2009 Fiscal
Year
- Nov 19, 2009* Earnings Release for the Fourth Quarter and Full 2009
Fiscal Year
New in the IFX podcast section at www.infineon.com/podcast
- Environmental Protection at Infineon
- Safe batteries thanks to intelligent encryption
- Increased safety by active Seatbelts
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, Infineons 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, the ability of Qimonda to
achieve cost savings and the success of any strategic initiatives it may
undertake, and any potential disposal of our interest in Qimonda. 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, the success of any
corporate activities we may undertake with respect to our interest in
Qimonda, 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 December 7, 2007.
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 03.12.2008
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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
End of News DGAP News-Service
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DGAP-News: Infineon reports results for the fourth quarter and the 2008 fiscal year and provides outlook for the first quarter and the 2009 fiscal year
| Source: EQS Group AG