Dollar vexes Infineon as bid talk boosts shares
Written on April 24, 2008
Infineon warned the weak dollar would keep sales at best flat this quarter, but the German chipmaker’s shares leapt as much as 8 percent on hopes it was close to a sale of its loss-making memory-chip business.
Infineon (IFXGn.DE: Quote, Profile, Research) reported in-line second-quarter results at its core automotive and communications chips units on Wednesday, and said it should make an operating profit this quarter excluding memory-chip subsidiary Qimonda (QI.N: Quote, Profile, Research), which it wants to sell.
Shares in Infineon rose 5.25 percent by 5:20 a.m. EDT to 5.41 euros and were the top gainer in Germany’s DAX .GDAXI index, after the Financial Times Deutschland reported Infineon was in talks with rivals Micron (MU.N: Quote, Profile, Research), Hynix (000660.KS: Quote, Profile, Research) and Elpida (6665.T: Quote, Profile, Research) to sell its 77 percent stake in Qimonda.
Traders said Infineon itself could be the target of a private equity takeover attempt online payday advance. Infineon, which has said it is “evaluating its different alternatives”, declined to comment. However, Chief Executive Wolfgang Ziebart told analysts on a conference call he had had no recent discussions with private equity.
Two days ago Infineon announced it would take a 1 billion-euro ($1.6 billion) writedown on its stake in Qimonda.
In the January-March quarter, Infineon reported earnings before interest and tax (EBIT) of 36 million euros ($58 million) excluding Qimonda and including 8 million euros in net charges, in line with market expectations.
The figure compared with 65 million euros the previous quarter and a loss of 29 million euros a year earlier.
Sales from continuing operations fell 4 percent quarter on quarter but rose 7 percent year on year to 1.05 billion euros.
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