Revenues and Losses Grow at Infineon
Infineon Technologies AG had revenues from continuing operations of Euro 1.48 billion, an increase of 3 percent sequentially and 13 percent year-on-year for the second quarter of fiscal year 2003. Total revenue for the first half of fiscal 2003 were Euro 2.93 billion, up 28 percent from Euro 2.28 billion in the same period last year. Net loss amounted to Euro 368 million, compared to a net loss of Euro 439 million year-on-year. The first half of fiscal year 2003 tax expense includes a valuation allowance for tax losses of Euro 125 million incurred in accordance with US GAAP. EBIT for the first half of this fiscal year was a loss of Euro 254 million, a significant improvement from an EBIT loss of Euro 735 million in the first half of the last fiscal year.
Dr. Ulrich Schumacher, President and CEO of Infineon Technologies AG commented: "We achieved a very good revenue growth and gained further market share in a continued difficult market environment mainly driven by increased sales for memory products and repeated record performance of the automotive & industrial segment. We increased our productivity significantly, however could not compensate for the dramatic price decline for memory products."
Net loss amounted to Euro 328 million compared to a net loss of Euro 40 million in the previous quarter and Euro 108 million in the second quarter of last fiscal year. The quarterly net loss reflects the strong price decline for DDR memory chips as well as continued pricing pressure in most segments. The second quarter tax expense includes a valuation allowance for tax losses incurred of Euro 103 million in accordance with US GAAP and as announced in the previous two quarters. In addition, net loss included exceptional effects of Euro 54 million related to inventory write downs, non-recurring license income, restructuring charges and acquisition-related expenditures. Without these effects net loss would have been Euro 171 million.
Basic and diluted loss per share for the second quarter of fiscal year 2003 was Euro 0.45, compared to a loss per share of Euro 0.06 in the previous quarter and Euro 0.16 year-on-year.
Quarterly EBIT (earnings before interest, minority interest and taxes) amounted to a loss of Euro 223 million, compared to a loss of Euro 31 million in the previous quarter, and to a loss of Euro 176 million in the second quarter of the last fiscal year. The quarterly EBIT loss includes exceptional effects of Euro 82 million.
Expenditures for Research and Development in the second quarter totaled Euro 254 million, or 17 percent of sales, slightly down from Euro 265 million sequentially. SG&A expenses totaled Euro 164 million or 11 percent of total revenues, down from Euro 172 million or 12 percent of total revenues in the previous quarter. The decrease in these expenditures was mainly due to Infineon's ongoing cost reduction measures.
Infineon's gross cash position, representing cash and cash equivalents, marketable securities and restricted cash amounted to Euro 1.5 billion, down sequentially from Euro 1.6 billion. The decrease in gross cash was mainly due to investing activities exceeding cash flow from operations during the quarter. Free cash flow, representing cash from operating and investing activities excluding purchases or sales of marketable securities, significantly improved to negative Euro 90 million, up sequentially from negative Euro 362 million. This improvement mainly stems from higher operating cash flow and lower capital expenditures compared to the previous quarter.
Revenues outside Europe constituted 56 percent of total revenues, up from 55 percent in the previous quarter, reflecting Infineon's increased sales in Asia, including Japan.