Overall sales were up 23 percent to 1.97 billion euros(about $ 2.48 billion) year-over-year. In the same time frame, concern losses were reduced by about 90 percent to 23 million euros ($28.6 million). In Q3 2005, losses had amounted to 240 million euros. Before taxes and capital costs, the company now nevertheless managed to generate a profit of 49 million euros.

The memory division, spun off by May 1st as Qimonda, rose its revenue on a comparable basis by 48 percent to 977 million (about $ 1.23 billion). Sequentially, sales climbed by 5 percent. While in the third quarter 2005 Infineon's memory activities booked a loss of 136 million euros (about $ 171 million), in the most recent quarter it achieved a profit of 100 million euros (about $ 126 million). Closely watched Qimonda is set for an IPO at NYSE, probably as early as August.

In contrast, the communication segment sales were declining by 15 percent year-over-year and 14 percent sequentially to 266 million euros (about $335 million). And again, this activity had to book a loss which amounted to 61 million euros (about $77 million) after 88 million euros in last year's third quarter and 29 million euros in the second quarter 2006.

The automotive, industrial and multimarket division which includes among others also security solutions and ASICs, booked sales of 714 million euros (about $899 million), 15 percent more year-over-year but 3 percent less sequentially.

For the fourth quarter, the company expects rising sales in the communication division as well as an improved profit situation, mainly due to increased sales to new customers. Recently, Infineon had announced that Korean LG Electronics will use Infineon platforms in its mobile handsets, thus reducing the company's dependency from handset maker BenQ which took over Siemens mobile phones about a year ago.

Sales in the automotive segment will slightly decline seasonally in Q4, the company said. In contrast, the company expects higher sales for security solutions and ASICs.

In early trade in Frankfurt, Infineon's shares declined 4.6 percent.