Infineon reports sales drop, warns of slowdown

24th January 2005, Comments 0 comments

24 January 2005 , MUNICH - German semiconductor concern Infineon Technologies AG reported on Monday that its sales dropped in the first quarter of the 2004-2005 business year and warned of a further slowdown ahead. Citing lower demand due to inventory corrections by customers, Infineon said its revenues in the quarter ending 31 December came to EUR 1.82 billion, down 9 percent on the preceding quarter but up 12 percent on the same quarter a year ago. Earnings before interest and taxes (EBIT), at EUR 211 mi

24 January 2005

MUNICH - German semiconductor concern Infineon Technologies AG reported on Monday that its sales dropped in the first quarter of the 2004-2005 business year and warned of a further slowdown ahead.

Citing lower demand due to inventory corrections by customers, Infineon said its revenues in the quarter ending 31 December came to EUR 1.82 billion, down 9 percent on the preceding quarter but up 12 percent on the same quarter a year ago.

Earnings before interest and taxes (EBIT), at EUR 211 million, were up by 87 percent from EUR 113 million the previous quarter due to one-off factors. The EBIT was some three times the EUR 70 million in the same quarter a year earlier.

The company cited the non-recurring license income of EUR 118 million resulting from a settlement with the ProMOS company of Taiwan as having boosted the EBIT.

Excluding this one-off factor, Infineon said that its EBIT declined in all segments except for Wireline Communications.

Infineon also said its results were hurt by the drop in the dollar.

Also thanks to the one-off licensing revenues, net income in the first quarter came to EUR 142 million, more than triple the EUR 44 million of the preceding quarter and also well up on the EUR 34 million in the first quarter of the previous year.

"As anticipated in our outlook from last quarter, we have seen a slowdown in most of our application segments, a further clear market weakening and lower customer demand during the first quarter," company chief executive officer Wolfgang Ziebart said.

"We have thus taken necessary measures to adjust inventory levels, which negatively impacted our first quarters results," he added, while also saying the company would be aiming to reduce costs by a further EUR 200 million.

The company said it now anticipates a further slowdown in demand in the overall world semiconductor market in the second quarter of the 2005 financial year, which ends next 30 September.

It cited seasonal effects as putting pressure on prices in all of the company's application segments, and a further decline in demand as customers continue to adjust inventory.

On the Frankfurt Stock Exchange, investors reacted negatively to Infineon's figures. By early afternoon, Infineon shares were down almost 3.1 percent at EUR 6.96.

DPA

Subject: German news
 

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