Infineon completes 2013 fiscal year with a strong fourth quarter

"In the fourth quarter revenue, result and margin increased for the third time in succession. The 2013 fiscal year has therefore turned out to be better than expected one year ago", stated Dr. Reinhard Ploss, CEO of Infineon Technologies AG. "We reacted quickly to market developments. Thanks to forward-looking cost management Infineon remained profitable even when demand was at its lowest. When the market picked up again, we were able to ramp up production quickly and gain market share." Group earnings in fourth quarter of 2013 fiscal year Fourth-quarter revenue of the Infineon Group increased by 3 percent to €1,053 million and was thus in line with the outlook at the beginning of the quarter. This positive development was primarily driven by the Industrial Power Control (IPC) and Chip Card & Security (CCS) segments. Revenue of the Power Management & Multimarket (PMM) segment increased slightly, while that of the Automotive (ATV) segment decreased marginally. Segment Result increased by 26 percent to €148 million, compared to €117 million achieved in the previous quarter. The Segment Result Margin in the fourth quarter was 14.1 percent, up from the 11.4 percent recorded in the preceding quarter. The Segment Result for the fourth quarter of the fiscal year did, however, contain the impact of certain non-recurring items. Most significant was the positive effect from a reduction in risk allowances for inventories, which was only partly offset by higher expenses for variable compensation. Excluding non-recurring items, the Segment Result Margin would have been in line with the level of approximately 13 percent forecasted at the beginning of the quarter. Income from continuing operations in the fourth quarter amounted to €139 million, compared with €82 million in the previous quarter. The income from discontinued operations improved quarter-on-quarter from negative €5 million to positive €3 million. Net income increased from €77 million in the third quarter to €142 million in the fourth quarter of the 2013 fiscal year. Earnings per share (basic and diluted) improved from €0.07 to €0.13. Investments – which Infineon defines as the sum of purchases of property, plant and equipment, purchases of intangible assets and capitalized development cost – increased from €71 million the third quarter to €155 million in the fourth quarters of the 2013 fiscal year. Depreciation and amortization amounted to €119 million in the fourth quarter, compared to €115 million in the third quarter. Outlook for the first quarter of 2014 fiscal year Due to the seasonal decline in demand towards the end of the calendar year, Infineon forecasts that revenue will decrease to between €960 million and €1 billion in the first quarter of the 2014 fiscal year, with quarter-on-quarter decreases expected in all four segments. In percentage terms, the decrease is likely to be significantly more pronounced for the PMM and CCS segments than for the ATV and IPC segments. In line with the expected decline in revenue, the Segment Result Margin is forecast to decrease to between 8 to 10 percent.