Infineon capex info:
Infineon's loss widens as Q4, outlook fails to excite
By Peter Clarke
Semiconductor Business News
(11/08/02 07:22 a.m. EST)
MUNICH, Germany -- Just days before the opening of the Electronica exhibition here -- the biennial opportunity for local chip giant Infineon Technologies AG to take center stage and shine -- the company has announced its fiscal year results. Larger than expected losses and gloomy 2003 forecasts for a number of industry sectors from normally upbeat Ulrich Schumacher, Infineon's president and chief executive officer, are likely to cast a shadow over next week's show.
In its fourth quarter, which ended September 30, Infineon had sales of about $1.40 billion down about 1% sequentially but up 28% compared to the fourth quarter of 2001. The fourth quarter net loss, which includes the impact of a deferred tax valuation allowance of about $277 million, amounted to about $511 million compared to a net loss of about $77 million in the previous quarter and a loss of about $528 million year-on-year.
The size of that fourth quarter loss surprised analysts according to reports. The larger-than-expected loss was accompanied by downbeat comments on the semiconductor outlook for at least the first part of 2003.
"The market outlook for the coming months shows no clear signs of a sustained improvement in demand yet. We have improved our sequential revenue growth in all logic segments by 25% over the last four quarters in a challenging market environment. 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," said Schumacher, in a statement.
For the whole year the company announced revenues of about $5.26 billion, a decrease of 8% from the previous fiscal year and a loss that widened to about $1.03 billion.
The revenue decrease resulted from the overall sluggish semiconductor market with substantial pricing pressure in all business groups, especially Memory Products, the company said. However, Infineon's Automotive & Industrial segment had its best quarterly and annual revenue performance ever. The communications and chipcard segments were hit by reduced capital spending of global telecommunication carriers, weak demand and strong overall pricing pressure.
Infineon improved its cash position a great deal during the year mainly by a major reduction of capital expenditure to about $650 million from $2.3 billion spent in fiscal 2001.
"The successful implementation of our cost cutting program 'Impact' resulted in more than Euro 2 billion 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.
Despite the current increase in demand and prices for memory products, Infineon said it is too early to assume a sustained market improvement. Infineon will continue to concentrate on reducing its DRAM manufacturing costs, extending the range of its DRAM product offerings and improving its memory product mix.
"Our ambitious strategic goal is to become one of the top four semiconductor companies and double our worldwide market share to 6% in the next five years. We expect our growth to come primarily from organic growth, supported by partnerships and strategic acquisitions. We will utilize our strong product and technology portfolios, system know-how and strategic partnerships in order to return to profitability," commented Schumacher.
AI
Market Data 
Markets 
