MUNICH -- Infineon Technologies AG today posted sequentially flat revenues for the first three months of 2001 compared to the final quarter of last year. Infineon said sales increased in all of its chip businesses--even memories--from the previous quarter, except for wireless communications ICs.
Infineon's revenues totaled 1.65 billion euros ($1.49 billion) in the company's fiscal second quarter, ended March 31, from 1.66 billion euros in the prior three-month period. Compared to a year ago, sales were up 8%. The Munich chip maker's net income fell to 23 million euros ($20.7 million) from a net income of 280 million euros in the prior fiscal quarter because of weakness in DRAMs and wireless communications products.
The company said it has cut its growth estimates this year and trimming capital spending in 2001 from a planned budget of 2.8 billion euros ($2.5 billion) to about 2.5 billion ($2.25 billion).
But Infineon also said there are initial indications that demand for DRAMs is increasing while inventories at PC houses have declined, setting up the potential for improvements in memory markets during the second half of 2001.
Revenues for Infineon's Memory Products group grew sequentially 4% to 516 million euros ($464.4 million), which was a decline of 22% from sales in the period last year. Infineon's earnings before interest and tax (EBIT) in memory products fell into a loss of 134 million ($121 million) in the quarter, ended March 31, down from earnings of 66 million in the previous quarter.
"Infineon maintained strong margins in its non-DRAM businesses -- wireline communications, security/chip card ICs and automotive/industrial -- despite a difficult market environment due to continued demand in these segments, further productivity gains and new high-margin products," said Ulrich Schumacher, president and CEO of the company.
The company's Wireline Communications Group's revenues were 227 million euros ($204 million), an 8% sequential increase from the prior quarter and 50% growth over sales in the period last year. The group's EBIT improved to earnings of 37 million euros ($33 million), an increase of 4 million euors from the prior quarter. Growth in this group was driven by demand for high-speed communications, fiber optics, and traditional infrastructure products.