Infineon Reports Results for Third Quarter of 2008 Fiscal Year

Infineon Technologies has reported results for the third quarter of the 2008 fiscal year, ended June 30, 2008.

Infineon’s revenues in the third quarter of the 2008 fiscal year were Euro 1,029 million, down two percent sequentially and up two percent year-over-year. The sequential decline reflects a decrease of revenues in the Automotive, Industrial & Multimarket segment. Excluding effects from currency fluctuations , primarily between the U.S. dollar and the Euro, and acquisitions and divestitures, revenues increased one percent sequentially and six percent year-over-year.

Infineon EBIT was Euro 71 million in the third quarter, up from Euro 36 million in the prior quarter. Infineon EBIT in the third quarter included a net gain of Euro 41 million, mainly in connection with the sale of the Hard Disk Drive (HDD) business to LSI. Infineon EBIT in the third quarter also included Euro 7 million for the amortization of acquisition-related intangible assets related mainly to the business acquired from LSI. Infineon EBIT in the second quarter included net charges of Euro 8 million, and Euro 5 million in amortization of such acquired intangible assets. For additional detail on net gains and charges included in Infineon EBIT, please see the table on page 9 of this release.

Net income from continuing operations for the third quarter was Euro 45 million, resulting in basic and diluted earnings per share of Euro 0.06. For the second quarter, net income from continuing operations was Euro 19 million, and basic and diluted earnings per share were Euro 0.03.

The net loss from discontinued operations was Euro 637 million for the third quarter. This loss included Infineon’s share in Qimonda’s net loss, as well as charges of Euro 411 million from the write-down of Qimonda to its estimated fair value less costs to sell.

Basic and diluted loss per share from discontinued operations was Euro 0.85. For the third quarter, Infineon reported group net loss of Euro 592 million, and basic and diluted loss per share of Euro 0.79.

From March 31, 2008, the financial reports of Infineon focus on the ongoing operations of the company. As a result, the assets and liabilities of Qimonda have been reclassified as held for disposal in the condensed consolidated balance sheets, and the individual line items in the condensed consolidated statements of operations reflect the results of Infineon’s segments excluding Qimonda. The results of operations of Qimonda are reported in one line item titled “Income (loss) from discontinued operations, net of tax”. In addition, earnings per share as well as the statements of cash flows differentiate between “continuing” and “discontinued” operations.

For the fourth quarter of the 2008 fiscal year, Infineon expects revenues to increase by a mid single-digit percentage compared to the third quarter.

However, the company notes that market risks in general are likely to rise and that the persistent weakness of the U.S. dollar against the Euro is adding to normal price declines in the company’s markets. The company anticipates Infineon EBIT, excluding net gains or charges, to remain stable or decline slightly. Infineon EBIT in the fourth quarter will include temporarily increased costs, as shipments of DRAM wafers out of Infineon’s 200-millimeter wafer facility in Dresden, Germany, to Qimonda came to an end in the third quarter. In connection with the company‘s IFX10+ cost-reduction program, the company expects to record significant net charges in the fourth quarter.

For more information, please visit the company’s website.

Infineon Technologies AG