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Technology Stocks : Semi Equipment Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Donald Wennerstrom who wrote (41975)	12/3/2008 1:27:33 PM
From: Donald Wennerstrom	Read Replies (1) \| Respond to of 95617

December 3, 2008, 11:25 am Infineon Shares Plunge 40% On Grim Outlook Posted by Eric Savitz Infineon (IFX) shares are down sharply this morning after the company provided an extremely grim outlook for the fiscal first quarter ending December and for all of fiscal 2009. In the third quarter, the German chip maker posted revenue of 1.15 billion Euros, up 12% sequentially and 2% year over year. The company posted a loss before interest and taxes of 220 million, due in part to charges of 253 million Euros for cost-reduction measures. The net loss from continuing operations was 244 million Euros, or 0.33 Euros per share. But the truly horrific part of the story is the outlook. The company sees December quarter revenues down 30% sequentially, due to revenue decreases in its automotive, wireless solutions and industrial and multi-market segments. The company noted that auto segment demand has been hit by production cuts in the automotive market; Infineon also noted that its wireless business has been hurt by overall weakening demand and “reduction in demand at one specific customer.” The company expects to lose money in the quarter. For the full year, the company sees revenue down at least 15% from fiscal 2008, singling out the automotive sector for particular blame, but forecasting down years as well for industrial, security and wireline communications segments. The company expects to lose money for the year. A few other tidbits: the company said a plan announced in August 2007 to sell its Altis manufacturing joint venture with IBM to Advanced Electronic Systems AG has fallen through; they continue to talk with another part about a sale, but have stopped classifying its operations as “held for sale.” On its stake in Qimonda (QI), the company said it continues to seek a buyer. It also warned that if Qimonda could not meet its obligations, Infineon might be on the hook for “antitrust and securities law claims, the potential repayment of government subsidies received and employee-related contingencies.” Infineon also said it has scrubbed any plan to spin off QI shares to holders, noting that the administrative costs involved would be “disproportionate to the value of the shares.” It all adds up to one big nightmare. IFX today is down 82 cents, or 40.4%, to $1.21. Meanwhile, QI is down 1 cent, to 14 cents.