Infineon's Q3 revenues up 13 percent Q-on-Q

NEUBIBERG, GERMANY: Infineon Technologies AG reported results for the third quarter of the 2009 fiscal year, ended June 30, 2009.

Infineon’s revenues in third quarter were Euro 845 million, up 13 percent compared to the second quarter and down 18 percent year-over-year. Infineon’s third quarter Segment Result improved significantly compared to the previous quarter, net loss was Euro 23 million.

“Thanks to higher sales, higher factory loading and the cost savings from our IFX10+
cost-reduction program, we improved our operational performance considerably during
the third quarter compared to the previous quarter. Together with strict cash
management, we generated positive free cash flow from continuing operations of Euro
152 million and reduced our net debt position significantly”, said Peter Bauer, CEO of Infineon Technologies AG.

During the third quarter, Infineon implemented a series of measures to improve its balance sheet and to achieve a more focussed product portfolio. The company launched a cash tender offer for a portion of its outstanding bonds and issued new convertible bonds.

In July 2009, it announced the sale of its Wireline Communications business and launched the pending rights offering, backstopped by Apollo. “If successful, these steps would complete the refinancing of the company”, said Peter Bauer.

The sequential increase in revenues reflects increased revenues in all of the company’s five operating segments. The Wireless Solutions (WLS) segment achieved by far the strongest percentage increase in revenues, with the segments Industrial & Multimarket (IMM), Automotive (ATV), Wireline Communications (WLC), and Chip Card & Security (CCS) following at some distance.

Third quarter earnings improved significantly compared to the second quarter. The drivers of the improvement included significant cost reductions, mainly due to the IFX10+ cost-reduction program, higher factory loading as Infineon carefully adjusted production according to the improved demand environment, and higher sales levels driven by the company’s strong product portfolio.

All of the company’s operating segments achieved positive Segment Result, except the ATV segment which posted a Segment Result of negative Euro 17 million.

Net loss from continuing operations for the third quarter was Euro 20 million, resulting in basic and diluted loss per share from continuing operations of Euro 0.03. For the second quarter, net loss from continuing operations was Euro 150 million, and basic and diluted loss per share from continuing operations was Euro 0.20.

Infineon reported loss from discontinued operations, net of income taxes, of Euro 3 million for the third quarter. As a result of Qimonda’s application to open insolvency proceedings on January 23, 2009, Infineon deconsolidated Qimonda during the second quarter.

For the third quarter, Infineon reported group net loss of Euro 23 million, and basic and diluted loss per share of Euro 0.03.

In the third quarter, Infineon’s free cash flow from continuing operations was Euro 152 million, compared to a free cash flow from continuing operations of negative Euro 22 million in the second quarter. This strong improvement was driven by improved operating results and the company’s strict cash management.