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Chip maker to cut costs as sales decline
By George Frey |
February 7, 2009, Saturday
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Print Edition
Print Edition
GERMAN chip maker Infineon Technologies reported a 404-million-euro (US$513 million) net loss for its fiscal first quarter yesterday.
The Neubiberg-based company said that its loss for the October-December period was smaller than the 529-million-euro loss a year earlier. Sales were down to 830 million euros from 1.2 billion.
Infineon said that, due to the continued market slowdown, it has "limited visibility with respect to its revenue development" in the current quarter.
"In the second quarter, market conditions will unfortunately worsen further," Chief Executive Peter Bauer said. "Responding to this challenge, we are reducing our cost and capital expenditure levels further. We will continue to focus on cash flows by reducing inventory levels even further and by managing working capital tightly."
Infineon said both sales and earnings fell across the board in the first quarter. It saw a 34-percent decline in sales of technology products for the struggling automotive industry. That unit made a 56-million-euro operating loss.
The company's chip card and security products division posted a 22-percent decline in sales and an operating loss of 1 million euros.
Sales of wireline communications technology products dropped 15 percent, with operating profit down 50 percent to 2 million euros.
Infineon said that it could be exposed to "a number of significant liabilities" after memory chip company Qimonda, in which Infineon holds a 77.5-percent stake, filed for bankruptcy protection in January.
Infineon said that it had set aside 195 million euros to cover potential costs but warned that those costs could rise in the future.
The company said that those liabilities could include antitrust and securities law claims, claims for repayment of government subsidies and employee costs.
The Neubiberg-based company said that its loss for the October-December period was smaller than the 529-million-euro loss a year earlier. Sales were down to 830 million euros from 1.2 billion.
Infineon said that, due to the continued market slowdown, it has "limited visibility with respect to its revenue development" in the current quarter.
"In the second quarter, market conditions will unfortunately worsen further," Chief Executive Peter Bauer said. "Responding to this challenge, we are reducing our cost and capital expenditure levels further. We will continue to focus on cash flows by reducing inventory levels even further and by managing working capital tightly."
Infineon said both sales and earnings fell across the board in the first quarter. It saw a 34-percent decline in sales of technology products for the struggling automotive industry. That unit made a 56-million-euro operating loss.
The company's chip card and security products division posted a 22-percent decline in sales and an operating loss of 1 million euros.
Sales of wireline communications technology products dropped 15 percent, with operating profit down 50 percent to 2 million euros.
Infineon said that it could be exposed to "a number of significant liabilities" after memory chip company Qimonda, in which Infineon holds a 77.5-percent stake, filed for bankruptcy protection in January.
Infineon said that it had set aside 195 million euros to cover potential costs but warned that those costs could rise in the future.
The company said that those liabilities could include antitrust and securities law claims, claims for repayment of government subsidies and employee costs.
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