News Article
Difficult times
Infineon Technologies have reported results for the second quarter of the 2009 fiscal year.
Infineon’s revenues in the second quarter were Euro 747 million, down 10 percent sequentially and 29 percent year-over-year. Infineon’s combined Segment Result was negative Euro 110 million, compared to negative Euro 102 million in the first quarter. Included in combined Segment Result was non-recurring Euro 33 million from the reduction of accruals for bonuses and incentives.
“Our progress with cost reduction measures was very good and revenues were as forecast despite a challenging operating environment. During the first half of the 2009 fiscal year, we reduced capital expenditures and working capital aggressively in order to contain free cash outflows. Finally, we successfully implemented the most effective cost-reduction program Infineon has ever had”, said Peter Bauer, CEO of Infineon Technologies AG.
The sequential decrease in revenues reflects a decline in four of the company’s five operating segments. The segments Industrial & Multimarket (IMM), Chip Card & Security (CCS) and Wireline Communications (WLC) saw the strongest percentage declines in revenues. Revenues of the Automotive (ATV) segment also decreased, whereas revenues of the Wireless Solutions (WLS) segment were driven by market share gains and increased compared to the first quarter, despite of the shrinking market. Excluding the effects of currency fluctuations and acquisitions and divestitures, revenues decreased 11 percent sequentially and 32 percent year-over-year.
Net loss from continuing operations for the second quarter was Euro 150 million, resulting in basic and diluted loss per share from continuing operations of Euro 0.20. For the prior quarter, net loss from continuing operations was Euro 116 million, and basic and diluted loss per share from continuing operations was Euro 0.16.
The loss from discontinued operations, net of tax, was Euro 108 million for the second quarter. Basic and diluted loss per share from discontinued operations was Euro 0.12. On January 23, 2009, Qimonda AG and its wholly owned subsidiary Qimonda Dresden GmbH & Co. oHG filed an application at the Munich Local Court to open insolvency proceedings. As a result of this application, Infineon deconsolidated Qimonda during the second quarter. In this context, the company recognized a loss of Euro 100 million primarily resulting from the recognition of accumulated currency translation effects, previously recognized in equity. The recognition of such accumulated losses did not have any impact on Infineon’s shareholders’ equity.
For the second quarter, Infineon reported group net loss of Euro 258 million, and basic and diluted loss per share of Euro 0.32.
In the second quarter, Infineon reduced inventories aggressively compared to the prior quarter, including by lowering production levels again from the already low levels in the first quarter. As a consequence, inventories declined 18 percent sequentially and net working capital was reduced by Euro 72 million during the second quarter. This decrease included cash inflow of Euro 95 million from the German bank deposit protection fund following the insolvency of Lehman Brothers and cash outflows of Euro 56 million in connection with the IFX10+ cost-reduction program. All in all, Infineon was able to contain free cash outflow to negative Euro 22 million in a quarter that may have marked the low-point for revenue and production levels.
“Our progress with cost reduction measures was very good and revenues were as forecast despite a challenging operating environment. During the first half of the 2009 fiscal year, we reduced capital expenditures and working capital aggressively in order to contain free cash outflows. Finally, we successfully implemented the most effective cost-reduction program Infineon has ever had”, said Peter Bauer, CEO of Infineon Technologies AG.
The sequential decrease in revenues reflects a decline in four of the company’s five operating segments. The segments Industrial & Multimarket (IMM), Chip Card & Security (CCS) and Wireline Communications (WLC) saw the strongest percentage declines in revenues. Revenues of the Automotive (ATV) segment also decreased, whereas revenues of the Wireless Solutions (WLS) segment were driven by market share gains and increased compared to the first quarter, despite of the shrinking market. Excluding the effects of currency fluctuations and acquisitions and divestitures, revenues decreased 11 percent sequentially and 32 percent year-over-year.
Net loss from continuing operations for the second quarter was Euro 150 million, resulting in basic and diluted loss per share from continuing operations of Euro 0.20. For the prior quarter, net loss from continuing operations was Euro 116 million, and basic and diluted loss per share from continuing operations was Euro 0.16.
The loss from discontinued operations, net of tax, was Euro 108 million for the second quarter. Basic and diluted loss per share from discontinued operations was Euro 0.12. On January 23, 2009, Qimonda AG and its wholly owned subsidiary Qimonda Dresden GmbH & Co. oHG filed an application at the Munich Local Court to open insolvency proceedings. As a result of this application, Infineon deconsolidated Qimonda during the second quarter. In this context, the company recognized a loss of Euro 100 million primarily resulting from the recognition of accumulated currency translation effects, previously recognized in equity. The recognition of such accumulated losses did not have any impact on Infineon’s shareholders’ equity.
For the second quarter, Infineon reported group net loss of Euro 258 million, and basic and diluted loss per share of Euro 0.32.
In the second quarter, Infineon reduced inventories aggressively compared to the prior quarter, including by lowering production levels again from the already low levels in the first quarter. As a consequence, inventories declined 18 percent sequentially and net working capital was reduced by Euro 72 million during the second quarter. This decrease included cash inflow of Euro 95 million from the German bank deposit protection fund following the insolvency of Lehman Brothers and cash outflows of Euro 56 million in connection with the IFX10+ cost-reduction program. All in all, Infineon was able to contain free cash outflow to negative Euro 22 million in a quarter that may have marked the low-point for revenue and production levels.
