News and New Products

Infineon Issues Earnings Warning

Online staff -- Electronic News, 1/13/2005

Infineon Technologies issued an earnings warning late Monday, saying it expects both revenues and earnings before interest and taxes (EBIT) to be below market expectations for Q1.

Infineon expects revenues of $2.41 billion (1.82 billion Euro) and EBIT of $279.6 million (211 million Euro).  These numbers include non-recurring license income of about $156 million (118 million Euro) in connection with the settlement with ProMOS.

The Munich, Germany-based company said its automotive and industrial segment is expected to post revenues of about $599 million (452 million Euro) and EBIT of about $66 million (50 million Euro).  Lower revenues combined with efforts to reduce inventory levels led to a decline of fab utilization and EBIT margin.

The wireline communications segment expects revenues of about $140 million (106 million Euro) with EBIT of about $66 million (50 million Euro).  Infineon said its plans to terminate the acquisition of Finisar and related restructuring of the fiber optics business in Q1 should leave no financial impact.

Revenues from the secure mobile solutions segment are expected to be about $581 million (439 million Euro) with EBIT of about $2.65 million (2 million Euro). Again results were influenced by reduced volumes due to inventory corrections at customers and lower than expected utilization rates, Infineon said in a statement.

In addition, logic segments were hurt by the sharp decline of the U.S. dollar.

Infineon projected that memory products segment revenues would come in at about $1.015 billion (766 million Euro) with EBIT at about  $260 million (196 million Euro), including the non-recurring license income associated with the company’s settlement with ProMOS.  Bit production has increased slightly, but shipments have declined due to an anticipated increase in inventory levels, Infineon said.  Both revenues and EBIT were hurt by the decline of the U.S. dollar.

Infineon will issue full results for Q1 2005 on Jan. 24, 2005.