Infineon Technologies, posting fiscal year 2002 results, reported larger-than-expected losses for its fiscal fourth quarter (ended September 30) and a less-than-optimistic outlook for some segments in the first part of 2003.
The German DRAM maker surprised analysts with a quarterly net loss of about US$511 million, up from a net loss of US$77 million in the previous quarter and US$528 million a year earlier. The company cited a deferred tax valuation allowance of US$277 million as included in the net loss.
Revenues for the fiscal fourth quarter came to about US$1.40 billion, down 1% from the previous quarter but up 28% from a year earlier.
For fiscal year 2002, Infineon posted US$5.26 billion in revenues, down 8% year-on-year.
“The revenue decrease resulted from the overall sluggish semiconductor market with substantial pricing pressure in all business groups, especially Memory Products,” said the company in a statement. The company also attributed the revenue decline in its communications and chipcard segments to dramatically reduced capital spending of global telecommunication carriers, weak demand and strong overall pricing pressure. However, the Automotive & Industrial segment showed the best quarterly and annual performance ever.
Company president and CEO Ulrich Schumacher appeared less than enthusiastic about the outlook for 2003. “The market outlook for the coming months shows no clear signs of a sustained improvement in demand yet. Currently, we see a stabilization of demand in mobile communications and a moderate development of demand in automotive semiconductors. However, development of demand in our wireline communications and chipcard segments remains uncertain until the end of the second quarter of fiscal year 2003. And we expect continued pricing pressure in all business groups in the months ahead,” he said in a statement.
The company did, however, cut costs significantly, mainly by reducing capital spending to about US$650 million from US$2.3 billion in fiscal year 2001.
“The successful implementation of our cost cutting program ‘Impact’ resulted in more than two billion euros cash savings since June 2001. Consequently we improved our free cash flow and gross cash position. This provides us with a solid financial foundation as well as sufficient flexibility to maintain our competitive market position,” commented Schumacher.
Article translated by Jane Wang and edited by Richard So
