Infineon Technologies AG reported preliminary unaudited group earnings results for the second quarter ended March 31, 2013. For the quarter, the company reported revenue of EUR 918 million against EUR 851 million in the first quarter of 2013. Income from continuing operations was EUR 36 million or EUR 0.03 per basic and diluted share against EUR 26 million or EUR 0.02 per basic and diluted share in the first quarter of 2013. Net income was EUR 33 million or EUR 0.03 per basic and diluted share against EUR 19 million or EUR 0.02 per basic and diluted share in the first quarter of 2013. Revenues in the second quarter increased by EUR 67 million to EUR 918 million, and 31% gross margin remained virtually flat compared to the prior quarter. The revenue increase was partly the consequence of a return to more normalized revenue levels in the Automotive segment (ATV). Investments, which the company defines as the sum of purchases of property, plant and equipment, purchases of intangible assets and capitalized research and development assets, went down from EUR 88 million in the first quarter to EUR 65 million in the second quarter of 2013. Free cash outflow from continuing operations increased from EUR 128 million in the first quarter of the 2013 fiscal year to free cash flow of EUR 73 million in the second quarter, an improvement of EUR 201 million, with most of the improvement attributable to the sharp increase in the cash inflow from operating activities (up by EUR 178 million) and lower investments (down by EUR 23 million). The company forecasts third quarter of 2013 revenue of about EUR 1 billion, with all segments expected to contribute to revenue growth. The group's segment result margin for the third quarter is forecast at approximately 10% of revenues. Based on first-half results and the outlook for the third quarter, the Management Board expects the fiscal year's revenue decline compared to the previous year at the upper end of the mid-to-high single digit percentage range previously announced. Thus the Segment Result Margin for the 2013 fiscal year is expected to be at the upper end of the mid-to-high single digit percentage range guided thus far. In terms of revenue growth compared to the previous fiscal year, the ATV, PMM and CCS segments are expected to fare better than the Group average in the fiscal year 2013, whereas IPC is expected to suffer from a revenue decline significantly higher than the Group average. Revenue of the OOS segment will again fall sharply, as goods and services sold relating to the previously sold Wireline Communications and Wireless mobile phone businesses continue to decrease as planned. Investments in the 2013 fiscal year will be in the region of EUR 400 million and compare with a depreciation and amortization expense of approximately EUR 470 million.

Infineon Technologies AG and GLOBALFOUNDRIES Inc. announced a joint technology development and production agreement for 40 nanometer (nm) embedded flash (eFlash) process technology. The cooperation will focus on technology development based on Infineon's eFlash cell design and manufacturing of automotive and security microcontrollers (MCUs) with 40nm process structures. Production of the next generation 40nm eFlash MCUs will take place at different GLOBALFOUNDRIES sites, initially in Singapore with subsequent transfer to its site in Dresden, Germany. This agreement with GLOBALFOUNDRIES is consistent with Infineon's strategy to engage in technology co-development for CMOS-based technologies in 65nm and below. Process and product qualification for security microcontrollers is planned for the second half of 2015. Automotive microcontroller production start is scheduled for the first half of 2017. Infineon and GLOBALFOUNDRIES have a longstanding relationship in development and manufacturing, including joint development and manufacturing of CMOS-based low-power mobile phone products.

Infineon Technologies AG, Q2 2013 Earnings Call, May 02, 2013