Infineon Reports First Profit in Two Years

The world's sixth-biggest chipmaker, Munich-based Infineon, reported its first profit in ten quarters on Monday. Cost cutting in addition to rising demand and prices for memory chips used in personal computers helped boost the company's bottom line. In the fourth quarter ending in September, Infineon had a net income of €49 million ($56 million) compared to a loss of €506 million ($582 million) a year ago. The company's management said it expected to post a profit in fiscal year 2004. Despite the good news, executives warned against becoming too enthusiastic and Frank Joachim of Trinkaus Capital Management told Bloomberg News that the company's outlook was "neutral at best." Demand for chips has been in a two-year slump and an earlier drop in prices had forced Infineon to cut more than 5,000 jobs and reduce its investments.