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ots Ad hoc-Service: Infineon Technologies AG <DE0006231004> Infineon Announces Strong First Quarter Performance in a Volatile Market Environment

Munich (ots Ad hoc-Service) -

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Infineon Announces Strong First
Quarter Performance in a Volatile Market Environment
The semiconductor manufacturing group Infineon Technologies today
announced results for its first quarter in fiscal year 2001 (ended
December 31, 2000).
Revenues in the first quarter reached EUR 1.66 billion, an 8%
increase from the first quarter of the previous fiscal year driven by
continued strong demand in Infineon's communications business groups,
especially in Smart Card ICs and Wireline Communications. The revenue
decline of 30% from the record level in fourth quarter of fiscal year
2000 was due to the weakening of the market for memory products.
Despite difficult market conditions, Infineon achieved a gross margin
of 40% compared with 53% in the fourth quarter and 37% in the first
quarter of 2000.
EBIT (earnings before interest, minority interest and tax),
including a one-time pre-tax gain of EUR 202 million from the
divestment of Infineon's Image & Video business, reached EUR 446
million, up 83% over the first quarter of fiscal year 2000 but down
45% from the record level of the previous quarter. Apart from this
gain, Infineon's earnings increase over last year's first quarter was
achieved through significant productivity gains, especially in the
communications segments. The expected decrease in EBIT from the
record level in the previous quarter reflects the current difficult
market environment for memory products caused by a strong price
decline in this segment.
Net income in the quarter increased to EUR 280 million, up 111%
from the first quarter of fiscal year 2000 but a decrease of 52% from
the previous quarter. Earnings per share/per ADS (basic and diluted)
for the first quarter 2001 reached EUR 0.45 as compared with EUR 0.22
and EUR 0.93 in the first and fourth quarter of fiscal year 2000,
respectively.
Outlook
Infineon is confident about a strong business development in 2001
based on the company's key competencies in high growth markets and
its valuable strategic customer base. Growth drivers for the company
will be the continued strong demand in communications, particularly
in smart card applications and in the infrastructure business, like
broadband and optical networking, where so far demand has exceeded
capacity. Overall, Infineon expects significant growth in the mobile
handset market. However, based on the reduction of previously very
aggressive forecasts of key customers Infineon expects market growth
not to be as strong as last year. The outlook for Infineon's
Automotive & Industrial business also remains positive. Based on a
gradually improving allocation situation, Infineon will be able to
better fulfill the demand of its key customers.
The market environment for memory products, especially in the PC
market, will remain difficult during the second quarter (ending March
31, 2001). Thereafter, Infineon expects the high inventory levels at
PC manufacturers to come down and thus allow for a more stable price
development for memory products. Infineon currently expects the DRAM
market outlook for the full fiscal year to remain positive with
demand rising in the second half of the year.
This discussion includes forward-looking statements about our
future business. These forward-looking statements include statements
relating to future developments of the world semiconductor market,
especially the market for memory products, Infineon's future growth,
the benefits of research and development alliances and activities,
our planned levels of future investment in the expansion and
modernization of our production capacity, the introduction of new
technology at our facilities, the transitioning of our production
processes to smaller structures, cost savings related to such
transitioning and other initiatives, our successful development of
technology based on industry standards, our ability to offer
commercially viable products based on our technology, our ability to
achieve our growth targets, and the continuation of current
developments in our financial results in the 2001 financial year.
These forward-looking statements are subject to a number of
uncertainties, including trends in demand and prices for
semiconductors generally and for our products in particular, the
success of our development efforts, both alone and with our partners,
the success of our efforts to introduce new production processes at
our facilities and the actions of our competitors, the availability
of funds for planned expansion efforts, as well as the other factors
mentioned herein. As a result, our actual results could differ
materially from those contained in the forward-looking statements.
FURTHER INFORMATION will be available on our web site
www.infineon.com from today (Wednesday, January 31) circa at 9:00
a.m. Central European Time (CET). The Management Board of Infineon
Technologies will conduct a telephone conference with analysts and
institutional investors on the same day at 3:45 p.m. (CET), to
discuss operating performance for the first quarter of 2001. A
broadcast of the telephone conference will be available live and for
download on Infineon's web site at http://www.infineon.com.
End
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