Chipmaker Infineon trims losses

FRANKFURT, Germany -- Infineon Technologies, Europe's second biggest chipmaker, said on Friday it trimmed its losses in third-quarter due to reduced costs and a slight pick-up in demand.

The Munich-based group said net losses for the three months to June narrowed to 76 million euros ($77 million) from 371 million euros a year earlier, beating analysts' forecasts of a 114 million loss.

Infineon said its loss per share was 0.11 euros in the last quarter, compared with 0.59 a year earlier.

Third-quarter losses before interest and tax came to 107 million euros ($107.8 million), compared with a 598 million loss in the same quarter last year. Analysts had forecast a loss of 192 million euros.

Infineon said revenues rose by 1 percent to 1.4 billion euros from 1.3 billion as prices for computer memory chips improved during the quarter. The company said it expected demand to increase further in the coming months due to sales of back-to-school personal computers.

It also expects moderate growth in the mobile phone market, but cautioned that the telecoms infrastructure sector was still a concern.

Infineon (FIFX) shares were down 2.6 percent to 17.05 euros in midday Paris trading on Friday.

"Infineon continued to improve its business performance and gained market share in an ongoing difficult market environment," Chief Executive Ulrich Schumacher said in a statement.

"We made further progress in cost reduction and increased revenues as well as improving our earnings in communications and automotive electronics despite continuos strong pricing pressure and adverse market conditions for memory products."

Infineon has been struggling to reduce costs over the past years as the chip industry experienced its worst slump, as customers delayed or cut spending on new machines amid a global economic slowdown.

The company, which is Europe's second biggest chipmaker after France's STMicroeletronics (PSTM), has slashed 5,000 jobs over the past year to meet falling demand in the sector.