Infineon high dependency on automotive and wireless sucks its revenues

The weak car and wireless device market has pulled Infineon latest quarterly revenues by 28% sequentially and 24% year over year. Infineon posted revenue of Euro 830 million for the first quarter of the 2009 fiscal year ended December 31, 2008. Not only automotive and wireless, even the other segments are also declined but to lesser extent.

For the first quarter, Infineon reported group net loss of Euro 404 million, and basic and diluted loss per share of Euro 0.50.

Action underway to reduce spending include, reduced work hours in the company's German production sites Regensburg and Dresden, has changed its bonus schemes for the 2009 fiscal year and has issued a new and very stringent travel policy. In addition, Infineon exited the employers' union in November 2008 in order to achieve more flexibility in wage adjustments.
Infineon expects revenues from continuing operations for the second quarter to decrease by approximately 10 percent compared to the first quarter.

Infineon is also weathering Qimonda insolvency proceedings. Following Qimonda's insolvency filing, Infineon may be exposed to a number of significant liabilities relating to the Qimonda business, including pending antitrust and securities law claims, potential claims for repayment of governmental subsidies received, and employee-related contingencies.