MUNICH -- Infineon Technologies AG today reported a 15% sequential drop in sales to 1.09 billion euros ($970 million) in the company's fiscal fourth quarter, ended Sept. 30, compared to 1.28 billion euros ($1.14 billion) in the prior three-month period. The revenue decline, caused mostly by price erosion in memories and weakness in all other IC segments, resulted in a net loss of 523 million euros ($465 million) in the fiscal fourth quarter.
"We are making significant progress in the implementation of our comprehensive "Impact" cost saving program aimed at reducing operating costs by more than 1 billion euros until the end of the 2002 fiscal year which concludes Sept 30, 2002," said Ulrich Schumacher, president and CEO of Infineon.
As part of the belt tightening, Munich-based Infineon said it was lowering its capital spending plans 61% to about 900 million euros ($801 million) in the new fiscal 2002 year from 2.3 billion euros ($2.05 billion) in the just-ended fiscal year. Before the end of the 2001 fiscal year, Infineon said it had lowered its capital spending from a previous estimate of 2.8 billion euros.
Infineon said the outlook for chip markets remains uncertain in the next six months due to the slowdown of worldwide economic growth and the current "global political environment." The company expects to see continued price erosion in DRAMs due to excess manufacturing capacity. Cellular phone shipments also have not recovered from a sharp drop off in early 2001, the company noted.
The company's Memory Products Group posted revenues of 243 million euros ($216 million) in the fiscal fourth quarter, a sequential drop of 27% from 332 million euros ($295 million) in the prior quarter and a decline of 54% from 1.27 billion euros ($1.13 billion) in the period last year. Infineon's Memory Group had a loss before interest and taxes of 522 million euros ($465 million) in the just-ended quarter compared to earnings of 727 million euros ($647 million) in the period last year.
Revenues in Infineon's Wireless Communications Group totaled 188 million euros ($167 million) in the fiscal fourth quarter, a sequential increase of 7% from 176 million euros ($157 million) in the prior quarter, but a 46% drop from 351 million euros ($312 million) in the same period a year ago. The wireless chip business recorded a loss before interest and taxes of 178 million euros ($158 million) compared to earnings of 261 million euros ($232 million) in the fiscal fourth quarter last year.
Infineon's Wireline Communications Group had sales of 142 million euros ($126 million) in the fiscal fourth quarter, a sequential decline of 24% from 188 million euros ($176 million) in the prior quarter and a drop of 29% from 199 million euros ($177 million) in the same period last year. The wireline unit has a loss before taxes and interest of 138 million euros vs. a loss of 13 million euros in the quarter last year, which included acquisition related expenses.
Only Infineon's Automotive and Industrial Group recorded earnings before interests and taxes (EBIT) in the fiscal fourth quarter. This group's 270 million euro ($240 million) sales were sequentially 6% lower than 288 million euro ($256 million) in the prior quarter. Sales were 7% higher than 253 million euros ($225 million) in the quarter last year. The automotive and industrial chip unit posted earnings of 32 million euros ($28 million) in fiscal Q4 2001 vs. an EBIT of 33 million euros in the same quarter last year.
Infineon's Security & Chip Card IC Group posted a 31% sequential decline in sales to 100 million euros ($89 million) in the fiscal fourth quarter vs. 144 million euros ($128 million) in the prior quarter, ended June 30. Compared to a year ago, the group's sales were 2% lower than 119 million euros in the Q4 2000 period. A loss before interest and taxes totaled 2 million euros vs. earnings of 18 million euros in the same period last year.
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