COMPANY PRESS RELEASE: Infineon Technologies AG ,one of the world’s leading semiconductor manufacturers,has announced results for its first quarter of fiscal year 2002 ended December 31, 2001, with revenues of Euro 1.03 billion, a decrease of 5 percent from the previous quarter and a decrease of 38 percent from the first quarter of fiscal year 2001.
Revenues decreased primarily as a result of a continued difficult market environment for the semiconductor industry, in particular for wireline communications and chip card ICs. However, the quarter also saw first positive signs in demand for mobile communication products and pricing for memory products as well as relatively stable demand in chips for automotive and industrial applications.
EBIT amounted to a loss of Euro 564 million, an improvement upon a loss of Euro 882 million in the previous quarter but down from earnings of Euro 446 million in the first quarter of fiscal year 2001. Earnings were negatively affected by further price erosion, especially for memory products through mid-November 2001 and increasing pricing pressure for chip card ICs. The previous quarter’s loss included one-time charges of Euro 307 million in connection with inventory write-downs, acquisition related expenses, restructuring and impairment charges, as well as net gains from the sale of non-core businesses.
Net loss amounted to Euro 331 million, a sequential improvement from a loss of Euro 523 million in the previous quarter but down from net income of Euro 280 million year-on-year. Loss per share for the first quarter was Euro 0.48 compared with a loss per share of Euro 0.76 in the previous quarter and with earnings per share of Euro 0.45 in the first quarter of the last fiscal year.
Infineon’s revenue performance was driven by continued strong demand in memory products as well as a moderate recovery of demand in mobile communication. However, these positive effects could not fully compensate the further deterioration in demand for ICs used in traditional telecom infrastructure products and reduced revenues in chip card ICs due to continuing weak demand and ongoing inventory reductions by customers in this industry sector, said Dr. Ulrich Schumacher, President and CEO of Infineon Technologies AG. Despite this difficult market situation, with continued strong pricing pressure in most segments, we were able to maintain a solid net-cash position due to intensive cash management and the further swift implementation of our comprehensive Impact cost savings program.
Infineon had a negative gross margin of 9 percent, improving from a negative gross margin of 32 percent in the previous quarter, due to inventory write-downs in the previous quarter and continued price pressure. Gross margin was down from a positive gross margin of 40 percent year-on-year, reflecting the price declines in most of Infineon’s business groups.
R&D expenditures in the first quarter totaled Euro 267 million or 26 percent of total revenues, down from Euro 344 million or 32 percent of total revenues in the previous quarter and up from Euro 257 million or 16 percent of total revenues year-on-year. In absolute terms, R&D expenditures were down 22 percent from the previous quarter of this year and up 4 percent year-on-year. The previous quarter R&D expenditures included Euro 56 million of in-process R&D in connection with the acquisition of Catamaran Communications.
SG&A expenses in the first quarter totaled Euro 164 million or 16 percent of total revenues, down from Euro 175 million (16 percent of total revenues) in the previous quarter and down from Euro 187 million (11 percent of total revenues) in the first quarter of last year. The decrease in SG&A expenses is the result of the implementation of Infineon’s overall cost saving measures.
Revenues outside Europe constituted 49 percent of total revenues, almost maintaining the same percentage of revenues from the previous quarter. As of December 31, 2001, Infineon had approximately 30,700 employees worldwide, with research and development staff accounting for approximately 5,300 of this total.
