Infineon Slides into Loss

Infineon, the German semi-conductors giant, said Tuesday it booked a net loss in the second quarter of its current business year as a result of falling demand and price pressure and the company refused to rule out a further loss in the third quarter. Infineon, which runs its business year from October to September, said in a statement it booked bottom-line loss of 114 million euros ($148 million) in the three months to March. The chip maker had booked net profit of 142 million euros in the preceding three months and profit of 39 million euros in the second quarter of last year.At the operating level, Infineon also slid into the red, turning in a loss before interest and tax (EBIT) of 117 million euros in the January-March period, compared with profit of 211 million euros the previous quarter and profit of 71 million euros a year earlier. Second-quarter sales amounted to 1.606 billion euros, a decline of 12 percent quarter-on-quarter and a fall of four percent year-on-year. The decline in operating earnings was "partially driven by lower sales volume in the communication division and by the strong decline in prices for memory chips," Infineon explained. In addition, earnings were negatively impacted by one-off reorganization charges in the communication division. Infineon said it was not expecting any major improvement in demand in the current quarter.