The company reported a fourth-quarter net profit of 49 million eurosmillion dollars) compared to a loss of 116 million euros in the third quarter of its business year -- the first time it had recorded a profit after nine consecutive loss-making quarters.

The fourth-quarter result compared with a loss of 506 million euros in the same quarter of 2002 and was at the low end of analysts' expectations ranging from 44.8 million to 97.1 million euros.

Looking ahead, the company said it expected to post a profit in the business year to September 2004 but did not give a specific number.

The fourth-quarter result brought Infineon's full-year net loss to 435 million euros, reduced from 1.02 billion euros in the previous business year.

In the fourth quarter, core profits, measured as earnings before interest payments and taxes, came in at 67 million euros, up from a loss of 116 million euros in the third quarter and a loss of 295 million euros in the same quarter in 2002.

Sales rose 37 percent in the fourth quarter to 1.76 billion euros from the same period in the previous year bringing sales for the full 2002-2003 business year to 6.15 billion euros.

"The company noted stronger demand as well as manufacturing cost reductions in its memory products business group and, since the second half of calendar year 2003, rising chip prices for its memory products," it said in a statement.

SPACE.WIRE