Infineon Technologies 4Q loss widens to $969M

German semiconductor maker Infineon Technologies AG said Wednesday that a write-down on its stake in Qimonda and lower chip prices on the global market combined to widen its fourth-quarter loss, the seventh in a row.

Infineon said it lost euro763 million ($968.8 million) in the fourth quarter that ended Sept. 30 compared with a euro280 million loss a year earlier.

The company's quarterly sales, though, managed to rise 2 percent to nearly euro1.2 billion compared with euro1.1 billion a year ago.

Investors reacted bitterly, pushing Infineon shares down 25 percent in Frankfurt trading to euro1.24 ($1.57).

Chief Executive Peter Bauer said he and the company were wary about the upcoming year given the global financial crisis.

"We are, however, concerned about the prospects for the quarters to come. The financial crisis and economic slowdown have already impacted the worldwide semiconductor market, which is reflected in significantly weakened demand in all of our target markets."

Infineon said dropping demand would decrease revenue in the first quarter of 2009 by 30 percent from the previous quarter, and bring it down by at least 15 percent from the first quarter 2008.

For the overall fiscal year 2008, the company posted a loss of euro3.1 billion compared with a euro368 million loss the year before, though revenue increased 6 percent to euro4.3 billion from euro4 billion in 2007. Write-downs related to Qimonda amounted to euro1.3 billion.

The write-down on Qimonda increased the quarterly loss by euro187 million. Like other computer memory chip makers, Qimonda has been hit hard by the economic slowdown and glut of inventory worldwide. Infineon said it reclassified Qimonda's assets and liabilities as being "held for disposal" on its balance sheet.

The impact of negative earnings at Qimonda hurt Infineon's overall quarterly loss by euro519 million in addition to the write-downs. Without the loss on the Qimonda stake, the quarterly loss on continuing operations was euro244 million.

Neubiberg-based Infineon Technologies spun off Qimonda AG in 2006 and still holds a 77.5 percent stake but is looking to sell it outright.

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On the Net:

http://www.infineon.com

http://www.qimonda.com