Qimonda AG has announced the results for the first quarter of its financial year (FY) 2007, which ended December 31, 2006. Qimonda achieved net sales of $1.52 billion in the first quarter of FY 2007, an increase of 73% year over year and a slight decrease of 5% quarter over quarter. First quarter FY 2007 EBIT improved 16% to $325.23 million compared to an EBIT of $279.70 million in the fourth quarter of FY 2006 and an EBIT loss of $160.01 million in the first quarter of FY 2006. Net income increased to $230.26 million or earnings per share (basic and diluted) of $0.68 compared to $2.2.94 million and earnings per share of $0.62 in the prior quarter and compared to a net loss of $165.22 million in the first quarter of FY 2006 or loss per share of $ 0.55.
“We achieved another strong earnings performance in the last quarter and maintained our high level of non-PC bit-shipments significantly above 50%,” said Kin Wah Loh, President and CEO of Qimonda. “We were also able to further increase productivity with more than 50% of our total capacity now converted to technologies with feature sizes of 90nm and below.”
The slight decline in net sales quarter over quarter was due to a lower bit-shipment level and a weaker US-dollar compared to the previous quarter. Overall bit-shipments increased by 64% year over year and declined by 3% quarter over quarter. 38% of Qimonda’s net sales in first quarter FY 2007 were generated in North America, 20% in Europe, 31% in Asia Pacific and 9% in Japan.
Qimonda’s improvement of its gross margin and net income quarter over quarter was mainly due to continued product portfolio optimization, relatively stable average selling prices, reduction in operating expenses and further productivity improvements. Year-over-year profitability increased significantly due to an improved pricing environment compared to a weak pricing for DDR2 memories a year ago. Profitability improvement year over year was also driven by substantially higher bitQimonda AG has announced the results for the first quarter of its financial year (FY) 2007, which ended December 31, 2006. Qimonda achieved net sales of $1.52 billion in the first quarter of financial year 2007, an increase of 73% year over year and a slight decrease of 5% quarter over quarter. First quarter financial year 2007 EBIT improved 16% to $325.23 million compared to an EBIT of $279.70 million in the fourth quarter of financial year 2006 and an EBIT loss of $160.01 million in the first quarter of financial year 2006.
Net income increased to $230.26 million or earnings per share (basic and diluted) of $0.68 compared to $2.2.94 million and earnings per share of $0.62 in the prior quarter and compared to a net loss of $165.22 million in the first quarter of financial year 2006 or loss per share of $ 0.55.
“We achieved another strong earnings performance in the last quarter and maintained our high level of non-PC bit-shipments significantly above 50%,” said Kin Wah Loh, President and CEO of Qimonda. “We were also able to further increase productivity with more than 50% of our total capacity now converted to technologies with feature sizes of 90nm and below.”
The slight decline in net sales quarter over quarter was due to a lower bit-shipment level and a weaker US-dollar compared to the previous quarter. Overall bit-shipments increased by 64% year over year and declined by 3% quarter over quarter. 38% of Qimonda’s net sales in first quarter financial year 2007 were generated in North America, 20% in Europe, 31% in Asia Pacific and 9% in Japan.
Qimonda’s improvement of its gross margin and net income quarter over quarter was mainly due to continued product portfolio optimization, relatively stable average selling prices, reduction in operating expenses and further productivity improvements. Year-over-year profitability increased significantly due to an improved pricing environment compared to a weak pricing for DDR2 memories a year ago. Profitability improvement year over year was also driven by substantially higher bit-shipments and strong progress in product diversification into non-PC applications.
Qimonda’s strong earnings performance also strengthened the company’s balance sheet. With cash flow from operations of $569.80 million, the net cash position at the end of the first quarter financial year 2007 improved to $1,065.45 million and the gross cash position to $1.56 billion. The company had capital expenditures of $287.50 million, mainly for the further expansion of its 300mm wafer manufacturing facility in Richmond as well as for equipment upgrades for the further conversion towards next generation 75nm DRAM technology. Based on its strong cash flow development and specific customer demand, Qimonda plans to pull-in about $195.14 million of capital spending from financial year 2008 to further accelerate productivity improvements and production capacity. The additional capital spending is expected to be financed out of the company’s cash flow and is planned to be used mainly for a faster ramp-up of its 300mm capacities at Richmond. Capital spending for the full financial year 2007 is now expected to range between $1,170.82 million and Euro one billion.
Outlook second quarter and financial year 2007
Qimonda expects its bit production to grow between 8-12% in the second quarter of the 2007 financial year. The company expects this bit growth to be based on improved productivity as a result of the continued conversion of capacities to 90nm technology and below. Qimonda also expects to maintain its share of bit-shipments to non-PC applications significantly above 50% in the next quarter.
For the full year, Qimonda expects bit demand to be driven by the continued strong growth for DRAM in consumer and communication applications and also by the introduction of the Windows Vista operating system. The company expects the market measured in bits to grow between 55 and 65%, in line with most market analyst expectations like Gartner and iSuppli for calendar year 2007. Qimonda intends to increase bit production in line with overall market growth.
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