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Electronics Production | January 13, 2005

Infineon expects revenue below expectations

Infineon Technologies AG announced, based on preliminary figures available, that it expects revenues and earnings before interest and taxes (EBIT) in the first quarter of fiscal year 2005 to be below market expectations.
The company expects revenues of approximately Euro 1.82 billion and EBIT of approximately Euro 211 million. These numbers include the non-recurring license income of approximately Euro 118 million in connection with the settlement with ProMOS.

The Automotive & Industrial segment is expected to show revenues of approximately Euro 452 million and an EBIT of approximately Euro 50 million. Lower revenues combined with an active reduction in inventory levels resulted in a decline of fab utilization and EBIT margin.

Wireline Communications is expected to show revenues of approximately Euro 106 million and a negative EBIT of approximately Euro 29 million. The company anticipates no financial impact of yesterday’s termination of the agreement with Finisar and the related restructuring of the Fiber Optics business in the first quarter of fiscal year 2005.

Secure Mobile Solutions is expected to show revenues of approximately Euro 439 million and an EBIT of approximately Euro 2 million. In line with the outlook provided in the context of the company’s fourth quarter results announcement, results were influenced by reduced volumes due to inventory corrections at customers and lower than expected manufacturing utilization.

All logic segments were negatively affected by the sharp decline of the US dollar.

Revenues of the Memory Products segment are expected to be approximately Euro 766 million, EBIT is likely to be approximately Euro 196 million, including the non-recurring license income of approximately Euro 118 million in connection with the settlement with ProMOS. While bit production has slightly increased, shipments have declined due to an anticipated increase in inventory levels. Revenues and EBIT were negatively affected by the sharp decline of the US dollar.

The information reported above is based on preliminary results. Further analysis will be required to finalize the results for the first quarter. Infineon at present will not provide further information.

The company will announce details on the results of the first quarter of fiscal year 2005 as well as an outlook for the current quarter on January 24, 2005. The same day, Infineon will host a telephone conference with analysts and investors at 10:00 a.m. Central European Standard Time (CET), and with media at 11:30 a.m. (CET).

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