Memory maker Infineon saw earnings rocket during the first quarter of FY2005 despite modest sales gains.
Revenue for the three months to 31 December 2004 totalled €1.82bn ($2.4bn), down on the previous quarter's $2.6bn but higher than the year-ago quarter's $2.1bn.
Infineon blamed the sequential decline, which affected all of its business units, on the ongoing inventory correction that's troubling the whole semiconductor industry. The company restructured into three divisions - Communications, Memory, and Automotive, Industrial and Multi-market - though this structure didn't come into operation until after Q1 FY2005 was over.
Net income for the period topped €142m ($185.6), 223 per cent higher than the €44m ($57.5m) Infineon reported last quarter and 318 per cent up on year-ago earnings of €34m ($44.4m).
Earnings before income tax (EBIT) came to €211m (19 cents a share), up from €113m (six cents a share) in the previous quarter and €70 (five cents a share) in the Q1 FY2004.
However, the gains came from exceptional items: €118m ($154.1m) in licensing income from ProMOS in Q1 FY2005, compared to a €132m ($172.4m) "impact of impairment and antitrust related charges" in the previous quarter.
Without such gains and losses, Infineon's business units reported EBIT declines, thanks to "lower sales volumes and lower fab utilisation in the Secure Mobile Solutions and Automotive & Industrial segments", Infineon said. The company's results were also negatively impacted by the decline of the US dollar, it added.
Infineon expects the sales slowdown to continue. Q2 FY2005 revenues and sales will fall further thanks to "seasonal effects, pricing pressure in all of the company's application segments, and a further decline in demand as customers continue to adjust inventory". ®
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