"We're aiming for profitability in the next quarter," Infineon chairman Ulrich Schumacher said in an interview published in the Tuesday edition of the Wall Street Journal Europe.

"Barring any negative outside influences, I think it's a goal we should be able to reach."

In a statement detailing its third-quarter performance, Infineon said it had managed to narrow its losses in the three months to June.

Infineon, which runs its business year from October to September, booked net loss of 116 million euros (131 million dollars) in the third quarter, a substantial improvement from the second quarter, when the net loss had amounted to 328 million euros.

But it was nevertheless wider than the loss of 76 million euros reported in the third quarter of 2002.

Infineon said the strong quarter-on-quarter improvement in the period from April to June was mainly due to "increased productivity, further cost-cutting and no significant inventory valuation effect compared to the previous quarter."

Underlying losses, as measured by earnings before interest and tax (EBIT), also improved on a quarterly basis, narrowing to 115 million euros in the April-June period from a loss of 223 million euros in the second quarter.

But the EBIT loss was still wider than the 110 million euros booked a year earlier.

Third-quarter revenues totalled 1.47 billion euros, little changed from the preceding three months, but up by 11 percent year-on-year, Infineon said.

Chairman Schumacher said third-quarter business had been hit by the strong euro and ongoing price pressure.

"However, we achieved a solid revenue performance in most of our business groups and significantly reduced our net loss" on a quarterly basis, Schumacher said, adding that Infineon currently felt the market environment was "more positive", especially for DRAM memory chips.

"We have seen first signs of a positive market trend in the past three months and thus look forward with optimism for a stronger improvement of demand ... in the second half of 2003," Schumacher said.

But during a telephone conference with analysts, he cautioned: "I wouldn't talk of a huge turnaround just yet."

"In the light of the continuing uncertainty of the global economic situation, which makes it difficult to predict consumer demand in our target applications, we will continue to implement our successful cost reduction and restructuring programs," he said.

Schumacher told the Wall Street Journal Europe that for the whole of the current business year, "we're cautiously optimistic, but still reluctant to predict a dramatic improvement."

And looking ahead to next year, "we're expecting solid growth," the chairman continued. "Whether it's the 15 percent analysts expect or in the 10 percent range is not important when you consider where we are now. Either way it would be a major improvement."

The third-quarter figures were better than expected, but Infineon shares nevertheless fell sharply on the Frankfurt stock exchange as investors decided to take profits, traders said.

Thus, the shares fell by 3.48 percent to 10.83 euros in a slightly weaker market.

SPACE.WIRE