Winston Churchill once said, "Germany is either at your feet or at your throat." These days he might have added,
"... or sneaking through the back door."
Infineon CEO cuts 2001 forecasts
Select group of analyst briefed at Tuesday lunch
ft.marketwatch.com{bb3ad16e-1b4c-453f-b7f8-1b8020443d7f}
By Andrew Bulkeley, FTMarketWatch 10:23:00 AM BST May 23, 2001
MUNICH (FTMW) -- Infineon Technologies [DE:623100] [US:IFX] Chief Executive
Ulrich Schumacher cut his forecasts for full-year growth Tuesday as the mobile
phone market remains weak and customers from other sectors demand price
cuts.
Schumacher trimmed the expectations in an exclusive lunch with analysts
Tuesday, sparking Morgan Stanley Dean Witter analyst Stuart Adrian to cut his
earnings per share outlook for the year ending September 30 to 20 euro cents
from 40 euro cents. Merrill Lynch made a similar move, cutting its outlook to 10
euro cents.
The downgrades sent Infineon shares down as
much as 3.8 percent Wednesday to €44.05 after
falling 1.5 percent on Tuesday. The shares had
gained about 4.5 percent Tuesday before the
meeting.
Schumacher says mobile phone sales to its two
biggest customers -- Siemens [DE:723610] [US:SI]
and Nokia [US:NOK] -- are 20 to 30 percent below where they need to be to meet
forecasts. Computer memory chip prices are also 10 to 15 percent below prices in
the first quarter of 2001, he told analysts.
"Infineon does not see the 450 million unit handset shipment for 2001 being met,"
said Merill analyst Andrew Griffin in a research note. He maintains his "neutral"
rating on the shares.
Selective disclosure
It wasn't just the warning that's problematic for shareholders.
Schumacher made the predictions to a select number of analysts during a lunch at
the Savoy Hotel in London. The analysts and their customers could then trade on
the news but Infineon refused to comment on the meeting, leaving private
investors in the cold about the outlook.
Such selective disclosure is forbidden by the Securities and Exchange
Commission in the U.S. but is little regulated in Europe. Last year, the SEC vowed
to crack down on companies who refused to allow small shareholders and
journalists access to analyst meetings.
Infineon, the chipmaking unit of Siemens, has a dual listing in Frankfurt and New
York. Its New-York listed shares closed down 3.8 percent at $39.56 Tuesday. |
