FRANKFURT, Germany - Infineon Technologies AG, the German maker of semiconductors, said Thursday that a downturn at its Qimonda computer memory chip subsidiary pushed it to a loss in the first quarter of its fiscal year as chip prices fell.
The company also reduced its outlook for demand for its products used by cell phone makers, and its shares tumbled 13.6 percent in Frankfurt to close at 5.79 euros ($8.47).
The Neubiberg-based company posted a loss of 396 million euros ($578.9 million) in the October-December period — its fourth consecutive quarterly loss — compared with a profit of 120 million euros a year earlier. Still, the results were still better than the loss of 445 million euros ($650.6 million) that analysts polled by Dow Jones Newswires had forecast.
The loss was largely due to a decline in profit from Qimonda, in which Infineon holds a 77.5 percent stake, the company said.
Revenue slipped to 1.6 billion euros ($2.3 billion) in the quarter from 2.1 billion euros a year ago.
Investors were disappointed by the company's revelation that it expects to post a pretax loss for the rest of the fiscal year on its communications unit, which makes chips and other products for wireless communications and applications.
The company said it expects that revenue in the unit will fall by 30 million euros ($43.9 million) in the second quarter because of declining demand from mobile phone makers.
Despite the drop, chief executive Wolfgang Ziebart said Infineon was still optimistic it could reach its target of a 10 percent pretax margin in the 2009 fiscal year, but added that "uncertain prospects for the global economy, the adverse currency development and the revised outlook are headwinds that make reaching this goal more challenging."
Excluding Qimonda, Infineon said its pretax profit was 65 million euros ($95 million) in the quarter, compared with a loss of 9 million euros a year earlier.
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