Infineon Posts First Profit In Two Years On Strong iPod, Vista Chip Sales

Includes: IFNNY, QI
by: Jonathan Liss

Infineon Technologies AG turned in its first profit in two years on strong iPod sales, and by proxy the chip it makes for the world's top selling MP3 player.ifx By the numbers, profits for the recently-ended quarter were €120 million ($155 million) good for EPS of €0.15 a share, versus a loss of €183 million in the year-earlier period (EPS of -€0.25). Revenue also rose 27% to €2.13 billion. Consensus Bloomberg estimates predicted earnings of just €89 million on greater revenue of €2.31 billion. In addition to a boost in iPod sales boosting profits, Microsoft's new Vista OS helped boost sales at Infineon's memory unit, Qimonda. Infineon still owns 86% of Qimonda, which reported earnings of €177 million for the quarter), after an IPO in August of 2006. Despite turning out its first positive earnings in two years, German analyst Malte Schaumann was concerned. "Earnings were mainly boosted through Qimonda and that's dangerous."

• Sources: MarketWatch, Bloomberg, Reuters,. Check back later for Infineon's 1Q07 conference call transcript.
• Related commentary: iPhone Design Wins: Samsung, Marvell, Infineon, Broadcom, Foundry Shakeout Looms—Who Will Remain Standing?, SanDisk, Infineon To Be Pressured By Memory Glut?
• Potentially impacted stocks and ETFs: Infineon Technologies AG (IFX), Qimonda AG (QI). Competitors: Micron (NASDAQ:MU), STMicroelectronics NV (NYSE:STM)

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