Infineon swings to Q1 EBIT of 216 mln eur from yr-earlier 122 mln loss UPDATE

Infineon swings to Q1 EBIT of 216 mln eur from yr-earlier 122 mln loss UPDATE

	Published : Mon, 29 Jan 2007 08:29 By : Agencies Print this Story

(updates with unit performance, details on restructuring charges)

MUNICH (AFX) - Infineon Technologies AG said it swung to a first-quarter EBIT profit of 216 mln eur, from a year-earlier 122 mln eur loss thanks to a strong showing at its Qimonda memory business.

The result topped the 177.25 mln eur consensus of analysts' estimates obtained prior to the Jan 23 release of Qimonda AG's first-quarter figures.

US-listed Qimonda reported last week that it achieved a first-quarter EBIT of 250 mln eur compared to a year-earlier 123 mln eur loss.

Infineon's first-quarter sales reached 2.131 bln eur, up from 1.674 bln but below the 2.266 bln eur consensus.

Net profit in the period reached 120 mln eur, up from a year-earlier 183 mln eur loss and also well ahead of the 88.61 mln eur consensus.

'In a challenging operating environment, results for the first quarter came out better than originally expected. For Infineon excluding Qimonda, EBIT remained substantially flat, before charges, despite the sales decline relative to the prior quarter,' chief executive Wolfgang Ziebart said in the earnings statement.

'In a mixed market environment, we should return to revenue growth in Automotive, Industrial & Multimarket in the current quarter and see strong design-win momentum in Communication Solutions, in particular in the baseband business.'

The company also said it expects revenues and EBIT in the current quarter excluding Qimonda and prior to the inclusion of charges 'to remain at least flat compared to the fiscal first quarter.'

In its initial earnings release, Infineon did not provide any details regarding the possible divestiture of its 86 pct Qimonda stake.

It listed 14 pct of the company in August last year, and Infineon chief executive Wolfgang Ziebart said earlier he intends to reduce the holding after the end of the 190-day lock-up period.

It expires on Feb 14, meaning that Infineon could sell shares in the company the following day.

The Automotive, Industrial & Multimarket (AIM) unit saw first-quarter EBIT reach 55 mln eur, up from 51 mln as sales rose to 710 mln eur from 652 mln.

Infineon also said AIM will increase sales slightly this quarter compared to the first quarter. It's EBIT margin should also improve.

Communication Solutions (COM) remained in the red, with its first-quarter loss widening to 57 mln eur from a year-earlier 21 mln eur loss.

First-quarter sales shrank to 236 mln eur from 334 mln as it continued to suffer from the insolvency of key client BenQ Mobile.

Infineon expects EBIT and sales to remain roughly unchanged this quarter compared to the first quarter.

The company also said that restructuring measures related to the insolvency will be recorded in the current quarter instead of the first quarter as originally announced.

'Such charges will be significantly lower than the 30 mln eur originally anticipated,' the company said in its statement.

alfred.kueppers@afxnews.com

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