Updated from 3:40 a.m. EST
Infineon Technologies (IFX) shares were soaring Friday after the company said its first-quarter loss narrowed to 404 million euros ($517 million) as sales declined 24% on weaker demand and "inventory corrections throughout the electronics supply chain."
The quarterly loss is the German semiconductor maker's eighth-straight.
A year earlier the company reported a loss of 529 million euros. Sales in the quarter fell to 830 million euros from 1.09 billion euros a year earlier.The latest quarter includes provisions and allowances of 195 million euros related to insolvency proceedings of its Qimonda (QI) subsidiary. Infineon said because of the continued market slowdown it has "relatively limited visibility with respect to its revenue development." It expects sales for the second quarter to decrease by about 10%. The company, shares of which were rising 15.4% to $1.05 in Friday trading, said it now targets annual cost savings of 600 million euros from its previous target of 250 million euros. "In the second quarter, market conditions will unfortunately worsen further," CEO Peter Bauer said in a statement. "Responding to this challenge, we are reducing our cost and capital expenditure levels further," he added. "We will continue to focus on cash flows by reducing inventory levels even further and by managing working capital tightly."