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FRANKFURT — German chipmaker Infineon Technologies AG said Wednesday that net losses narrowed 94 percent in its fiscal third quarter as it excluded an insolvent unit from its accounts and as a broad restructuring plan began to pay off.
The Neubiberg-based company said its loss for the April-June period was euro23 million ($33 million) compared with euro379 million a year earlier.
Revenue fell 18 percent to euro845 million from just more than euro1 billion last year.
Infineon said the bottom line improved because it had excluded the results of the Qimonda unit, which is in insolvency proceedings. Also helping were cost reductions, carefully adjusted production and positive operating results in all divisions except automotive, which saw demand for its car components decline significantly through the downturn. The automotive division reported a third quarter operating loss of euro17 million.
Compared to the previous quarter, Infineon's revenue jumped 13 percent from the euro747 million at the end of March.
The company said revenues increased from the second quarter in all its segments, mainly at the wireless solutions division, but also at the wireline communications, chip card and security divisions.
The company, whose fiscal year begins in October and already reported preliminary earnings July 16, said it also expects sales to increase in the fourth quarter.
"Thanks to higher sales, higher factory loading and the cost savings from our cost-reduction program, we improved our operational performance considerably during the third quarter compared to the previous quarter," said Peter Bauer, Infineon's chief executive, in a statement.
Earlier this month, Infineon also outlined plans to streamline the company and raise capital.
Infineon aims to raise euro725 million in cash by issuing 337 million new shares. Apollo Global Management LLC agreed to acquire about 326 million of the shares which will be issued at a subscription price of euro2.15. The issuance began July 20 and will run through next month.
New York-based Apollo is expected to hold a minimum of 15 percent of Infineon's share capital after the rights issue, up to a maximum of 30 percent, minus one share. It will also gain representation on Infineon's supervisory board, the German equivalent to a U.S. board of directors.
Infineon has said it plans to use the money for purposes including paying down debt.
Earlier this month, Infineon also announced it would sell its wirelines communications unit to an affiliate of U.S. investor Golden Gate Capital in a euro250 million ($349 million) deal in order to focus on its core semiconductor business.
Infineon has said the sale of the unit — whose products are used to offer Voice over Internet Protocol, or VoIP, services and fast Internet connections — "will significantly improve Infineon's financial situation."
The company is also working to make its majority stake in Qimonda, another German computer chipmaker, more profitable or divest it. Qimonda began insolvency proceedings in January.
Shares of Infineon closed up 2.7 percent at euro2.73 in Frankfurt.
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