Infineon reports results for the fourth quarter and the 2007 fiscal year
For the full version of this news release (incl. financial data and business highlights), please download the PDF version available on the right
Analyst telephone conference (Nov 14th / 10:00 AM (CET) / 9:00 AM (UK) / 4:00 AM (EST))
Press conference (Nov 14th / 11:30 AM (CET) / 10:30 AM (UK) / 5:30 AM (EST))
Neubiberg, Germany – November 14, 2007 – Infineon Technologies AG (FSE/NYSE:IFX) today reported results for the fourth quarter, ended September 30, and for the full 2007 fiscal year.
Results for Infineon excluding Qimonda for the fourth quarter
Revenues for Infineon excluding Qimonda in the fourth quarter of the 2007 fiscal year were Euro 1.13 billion, up 11 percent sequentially, reflecting increases in both the Automotive, Industrial & Multimarket and the Communication Solutions segment.
EBIT for Infineon excluding Qimonda was negative Euro 25 million in the fourth quarter, down from positive Euro 13 million in the prior quarter. Fourth quarter EBIT included net charges of Euro 94 million, mainly relating to the sale of Qimonda shares. EBIT in the third quarter included net charges of Euro 3 million. Excluding these charges, EBIT improved to Euro 69 million in the fourth quarter, up from Euro 16 million in the third quarter.
The Automotive, Industrial & Multimarket segment reported record sales in the fourth quarter with Euro 814 million in revenues and 12 percent segment EBIT margin. Segment EBIT increased to Euro 98 million from Euro 81 million in the prior quarter. Third quarter segment EBIT included a gain of Euro 17 million related to the sale of the company’s Polymer Optical Fiber (POF) business.
In the Communication Solutions segment, revenues were Euro 318 million in the fourth quarter, and segment EBIT improved to negative Euro 16 million from negative Euro 34 million in the prior quarter.
Results for Infineon excluding Qimonda for the 2007 fiscal year
Revenues in the full 2007 fiscal year for Infineon excluding Qimonda were Euro 4.07 billion compared to Euro 4.11 billion in the previous year. EBIT for Infineon excluding Qimonda was negative Euro 49 million in the 2007 fiscal year, compared to EBIT of negative Euro 217 million in 2006. EBIT in the 2007 fiscal year included net charges of Euro 128 million compared to net charges of Euro 199 million in the previous year. Excluding these charges, EBIT improved to a profit of Euro 79 million for the 2007 fiscal year, up from negative Euro 18 million in the 2006 fiscal year.
Results for the Infineon group for the fourth quarter
In the fourth quarter, the Infineon group reported revenues of Euro 1.84 billion, net loss of Euro 280 million, EBIT of negative Euro 241 million, and basic and diluted loss per share of Euro 0.37. Included in the group net loss were charges of Euro 53 million relating to the write-down of deferred tax assets in connection with the adoption of the German Corporate Tax Reform Act 2008.
Results for the Infineon group for the 2007 fiscal year
Group revenues in the 2007 fiscal year were Euro 7.68 billion, down three percent year-on-year. Group net loss for the 2007 fiscal year amounted to Euro 368 million, compared to a net loss of Euro 268 million in the 2006 fiscal year. Group EBIT was negative Euro 256 million in the 2007 fiscal year, compared to EBIT of negative Euro 15 million in the prior year. Basic and diluted loss per share amounted to Euro 0.49 in the 2007 fiscal year, down from basic and diluted loss per share of Euro 0.36 in the 2006 fiscal year.
Outlook for Infineon excluding Qimonda for first quarter of the 2008 fiscal year
For the first quarter of the 2008 fiscal year, Infineon expects revenues for its segments excluding Qimonda, and including the mobile phone business recently acquired from LSI, to be about flat compared to the last quarter. The company anticipates EBIT for its businesses excluding Qimonda and excluding charges to decrease from last quarter’s level. In the first quarter, Infineon expects to book a low double-digit million Euro gain from the sale of a stake in its high-power bipolar activities. Antitrust approval for this transaction is still pending. In addition, Infineon expects to include a low double-digit million Euro write-down of acquired in-process research & development relating to the mobile phone business recently acquired from LSI.
Additional details concerning the outlook can be found in the segments’ sections below.
“We have improved EBIT and EBIT margin for Infineon excluding Qimonda and excluding charges throughout the 2007 fiscal year. EBIT in the Communication Solutions segment improved each quarter as we executed on our turn-around. The Automotive, Industrial & Multimarket segment also posted improved EBIT in each quarter of the 2007 fiscal year, with record revenues and EBIT in the fourth quarter”, said Dr. Wolfgang Ziebart, President and CEO of Infineon Technologies AG. “We expect to improve EBIT excluding charges for Infineon excluding Qimonda significantly in the 2008 fiscal year compared to the previous year and to make a significant step towards our fiscal 2009 goal of ten percent EBIT margin. We expect to meet our turn-around goal in wireless with break-even EBIT in the current quarter.
We also anticipate that our recent acquisitions of the DSL business of Texas Instruments and the mobile phone business of LSI will contribute to our growth.”
Segments’ fourth quarter performance and outlook
Automotive, Industrial & Multimarket (AIM)
In the fourth quarter of the 2007 fiscal year, the Automotive, Industrial & Multimarket segment reported record revenues of Euro 814 million, representing an eight percent increase compared to the prior quarter. Segment EBIT increased to Euro 98 million from Euro 81 million in the prior quarter. Third quarter segment EBIT included a gain of Euro 17 million related to the sale of the company’s POF business.
Revenues and EBIT in the automotive business remained broadly unchanged from the third quarter, as expected. The industrial & multimarket business increased revenues and EBIT significantly, mainly due to seasonally higher demand in the consumer, computing, and telecom markets. The results of the security & ASICs business were better than anticipated, mainly due to high demand in the chip card and security business.
Automotive, Industrial & Multimarket’s outlook for first quarter of the 2008 fiscal year
In the first quarter of the 2008 fiscal year, Infineon expects the revenues of its Automotive, Industrial & Multimarket segment to decline by a high single-digit percentage compared to the prior quarter, mainly due to the usual seasonal pattern, the weak U.S. dollar, the deconsolidation of the high-power bipolar business, and to a lesser extent annual price reductions for major customers. Segment EBIT prior to inclusion of a low double-digit million Euro gain from the sale of a stake in the high-power bipolar activities is expected to follow the revenue decline. Revenues in the segment’s automotive business are expected to remain broadly unchanged from the previous quarter despite annual price reductions for major customers.
Revenues in the industrial & multimarket business are anticipated to decline due to seasonal weakness in the consumer, computing and telecom markets, the weak US dollar, and the deconsolidation of the high-power bipolar business. Results in the security & ASICs business are anticipated to decrease as some normalization in the chip card and security business is to be expected after the exceptionally high demand levels of the prior quarter.
Communication Solutions (COM)
In the fourth quarter of the 2007 fiscal year, revenues in the Communication Solutions segment were Euro 318 million, a 23 percent increase compared to the prior quarter. This included a high-teens million Euro contribution from the DSL CPE activities acquired from Texas Instruments (TI). Segment EBIT for the fourth quarter improved to negative Euro 16 million, compared to negative Euro 34 million in the third quarter.
In the wireless business, revenues increased strongly, as expected, driven mainly by a further significant increase in mobile phone platform shipments. Excluding the acquired DSL business, revenues in the broadband business increased slightly compared to the prior quarter.
Communication Solutions’ outlook for the first quarter of the 2008 fiscal year
Revenues in the Communication Solutions segment are expected to grow significantly in the first quarter of the 2008 fiscal year compared to the prior quarter. This is expected to be driven by the full-quarter inclusion of the DSL CPE business acquired from TI, by the consolidation of the mobile phone business recently acquired from LSI, and by continued growth in shipments of mobile phone platform solutions. Segment EBIT as well as EBIT for the wireless business are anticipated to be about break-even prior to inclusion of a low double-digit million Euro charge for the write-down of acquired in-process research & development in connection with the acquisition of the mobile phone business of LSI, which Infineon expects to book in the first quarter of the 2008 fiscal year.
In the fourth quarter of the 2007 fiscal year, Qimonda reported revenues of Euro 711 million, a decline of four percent from Euro 740 million in the third quarter. Fourth quarter EBIT was negative Euro 216 million compared to an EBIT of negative Euro 293 million in the third quarter. Minority interests, calculated from Qimonda’s fourth quarter net loss, were Euro 42 million. Infineon’s ownership in Qimonda as of September 30, 2007 was 77.5 percent, after Infineon sold 28.75 million Qimonda shares in the fourth quarter.
Qimonda’s outlook for the first quarter of the 2008 fiscal year
In the first quarter of the 2008 fiscal year, Qimonda expects its bit production to grow approximately 5 percent quarter over quarter, mainly based on productivity improvements from the ongoing conversion to 80 nanometer and 75 nanometer technologies, and including the effects of reducing 200 millimeter capacities.
Other Operating Segments / Corporate and Eliminations
EBIT in Corporate and Eliminations included net charges of Euro 93 million in the fourth quarter, mainly relating to the sale of Qimonda shares.
EBIT of Corporate and Eliminations 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.
Other Operating Segments / Corporate and Eliminations’ outlook for the first quarter of the 2008 fiscal year
In the first quarter, Infineon expects revenues and EBIT in Other Operating Segments and Corporate and Eliminations to remain broadly unchanged compared to last quarter’s EBIT prior to inclusion of the charges mentioned above.
Additional major business highlights of Infineon’s segments in the fourth quarter of the 2007 fiscal year can be found in this document after the financial tables.
All figures 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 November 14, 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 fourth quarter of the 2007 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 www.infineon.com.
IFX financial and trade fair calendar (*preliminary date)
- Feb 7, 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
- Jun 2/3, 2008* IFX Day: Annual Analyst and Investor Day
- 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
New in the IFX podcast section at www.infineon.com/podcast
- Silicon Microphone
- Infineon develops a new and energy efficient transistor technology
- High-definition sound using Voice over IP (VoIP)
- Voice over IP -- a Myth or a piece of cake?
Infineon Technologies AG, Neubiberg, Germany, offers semiconductors and system solutions addressing three central challenges to modern society: energy efficiency, communications, and security. In the 2007 fiscal year (ending September), the company reported sales of Euro 7.7 billion (including Qimonda sales of Euro 3.6 billion) with approximately 43,000 employees worldwide (including approximately 13,500 Qimonda employees). With a global presence, Infineon operates through its subsidiaries in the U.S. from Milpitas, CA, in the Asia-Pacific region from Singapore, and in Japan from Tokyo. Infineon is listed on the Frankfurt Stock Exchange and on the New York Stock Exchange (ticker symbol: IFX).
Qimonda AG is a leading supplier of DRAM memory products. Following its carve out from Infineon Technologies AG on May 1, 2006, Qimonda went public on the New York Stock Exchange on August 9, 2006. The company generated net sales of Euro 3.6 billion in its 2007 fiscal year with approximately 13,500 employees worldwide. Qimonda has access to five 300mm manufacturing sites on three continents and operates five major R&D facilities, including its lead R&D center in Dresden, Germany. The company is a leading supplier of DRAM products to PC and server manufacturers and is increasingly using its power saving trench technology for graphics, mobile and consumer applications. Further information is available at www.qimonda.com.
Infineon’s group results include the consolidated results of Qimonda. Qimonda provides outlook on its business separately.
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.