|
During the fiscal quarter ended 31 March, the company's revenues were down and its losses rose significantly compared to the same period last year. But Infineon's figures showed startling improvements over the quarter immediately preceding this, as its cost-cutting measures and improved demand both took effect.
Compared to the fiscal first quarter of 2002, revenues rose 34 percent to EUR1.39 billion, and net loss fell to EUR108 million, down from EUR331 million last quarter, and better than analysts' expectation of a EUR202 million loss. For the same period in 2001, Infineon recorded net income of EUR23 million and revenues were 16 percent higher.
Infineon makes a wide range of semiconductor products, including equipment for telecoms operators, mobile phones, wireless local area networks, smartcards, on-board electronics for automobiles and memory products for PCs.
Infineon chief executive Dr. Ulrich Schumacher said all business groups saw improved demand during the quarter, and he pointed to the strong increase in prices for memory products as a particular benefit for Infineon. Memory products including DRAM chips represent the largest segment of Infineon's business.
Speaking on CNBC on Tuesday morning, Schumacher said the company was also seeing better than expected results in cutting its cost base following its restructuring program. Last September the company announced 5,000 job cuts aimed at saving EUR1 billion for the company.
Schumacher offered a positive but guarded outlook, pointing to factors like the modest growth expected in the worldwide market for mobile handsets, as well as some growth in the broadband access market as DSL rolls out in Europe and Asia. But the company said that overall, it expects the market for telecom infrastructure to remain difficult, and Infineon gave no date of when it would return to profitability.
"We believe the turnaround has been achieved and we are back to a growth path, but we want to stay cautious," Schumacher said. "We expect that revenue for next quarter will continue to grow and losses will continue to reduce, but we don't want to be much clearer on the question of when we will be profitable again."
The results published Tuesday are somewhat of a vindication for the chipmaker, which at the time of its restructuring announcement last autumn was facing market speculation that it may not have enough cash to make it through 2002. Since then Infineon has managed to boost its balance sheet, nearly doubling its cash and cash equivalents to EUR1.4 billion as of 31 March, up from EUR757 million six months ago.
Siemens, which spun off its semiconductor division as Infineon in 1999, has steadily reduced its shareholding in the company but still retains just over 41 percent of Infineon. That large holding effectively depresses the Infineon share price -- investors may be waiting to buy into Infineon, since the price would dip when Siemens puts its large holding up for sale.
Schumacher admitted that the Siemens overhang on Infineon's share price exists, but he said is confident that Siemens will proceed carefully. "I am absolutely sure that whatever Siemens does, it will do in a very cautious way and will not spoil the market," he said.
|
