"For the first quarter of fiscal 2004, we're expecting an increase in sales on a quarterly basis and a further improvement in earnings," Epcos said in a statement.

"And for fiscal 2004 as a whole, we're anticipating an increase in sales, as well as further improvements in earnings and cash flow," the statement added.

In the 12 months ended September 30, Epcos booked net profit of seven million euros (8.2 million dollars), compared with a bottom-line loss of 39 million euros a year earlier.

Underlying results also improved, with earnings before interest and tax (EBIT) showing a profit of six million euros, compared with a year-earlier loss of 45 million euros, even if sales fell by three percent to 1.27 billion euros.

The fourth quarter alone was slightly disappointing, and although new orders were up 21 percent at 328 million euros in the period from July to September and sales climbed five percent to 302 million euros, underlying earnings were negative with an EBIT loss of 11 million euros.

That was largely due to 15 million euros in restructuring costs, without which Epcos would have booked a fourth-quarter underlying profit of four million euros, it said.

"New orders have revived significantly since the summer," Epcos said. "This trend is still intact, mainly thanks to brisk Christmas business."

But it added: "The extent to which this revival in demand will continue into the spring of 2004 remains to be seen."

As part of additional cost-cutting measures, Epcos plans to relocate around 800 jobs to Asia by 2005, chairman Gerhard Pegam told the company's annual earnings news conference here.

Around 500 of the jobs affected would be moved from Germany, where Epcos employs 2,295 people, the chairman added.

Epcos will also relocate 100 jobs from France, where it plans to close its factory in Lormont, near Bordeaux and shift production to the Czech Republic.

SPACE.WIRE