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The company, which has a sales operation in Ireland with a staff of 10, had a third quarter loss of EUR598 million before interest and tax. Its revenues for the quarter were EUR1.28 billion, down 30 percent from the previous year and 23 percent lower than in the second quarter. Net losses in the third quarter were EUR371 million, compared with net income of EUR637 million from the same quarter in the previous year and net income of EUR394 million in the previous quarter.
Infineon has suffered from the collapse in prices for D-Ram chips, the commodity chips used in PCs, as well as the fall in demand for mobile phones. The company said that it did not expect conditions in these markets to improve in the short-term.
According to Paul Phelan, technology analyst with Davy Stockbrokers, Infineon's results did not come as a shock as they had been well flagged in advance.
"This set of results underscores the fact that the semiconductor sector is going through a very tough time at the moment and there is no sign yet of it turning the corner," commented Phelan. "Until recently people were saying that the market would recover by the end of the year, but I have no great confidence that it will rebound within that time," Phelan said.
Infineon also said that revenues declined in its wireline and wireless divisions, as well in its security and chip card, and memory products businesses, compared to the previous quarter. The company put this down to weaker demand, lower product prices and order cancellations.
According to the company, "visibility for market development" in second half of the calendar year 2001 will remain low. It added that there are no clear signs of a market recovery in the coming months and it expected to incur a net loss in the fourth quarter, as well as a loss for its fiscal year 2001.
The company said that it already implemented a hiring freeze and cut planned capital expenditures. However, it intends to use the EUR1.5 billion it raised from its recent public offering to fund future capital expenditures and potential acquisitions, as well as for working capital.
"Our public offering, in combination with our reduction of planned capital expenditures for the current and next fiscal year, and the cost cutting measures we have implemented, will enable us to continue to fund cutting-edge research and development, as well as to implement our aggressive productivity roadmap, especially our leadership in 300m technology," commented Dr. Ulrich Schumacher, president and chief executive officer of Infineon. "With these measures, we will be in a strong competitive position to benefit from any upturn in the semiconductor industry."
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