Nov. 19 (Bloomberg) -- Infineon Technologies AG, Europe’s second-largest maker of semiconductors, said sales may be “low” in the future following the sale of its Wireline Communications unit and the recession.

Infineon dropped 7.2 percent in Frankfurt trading. “Even though business is gradually picking up, we have to continue to be prepared for a low level of revenues,” Chief Executive Officer Peter Bauer said at the company’s earnings press conference today.

Neubiberg, Germany-based Infineon returned to profit in the fiscal fourth quarter on increased demand from automotive and industrial customers. The net income, the first after 10 consecutive quarters of losses, was 14 million euros ($20.9 million) compared with a loss of 884 million euros a year earlier, the company said in a statement today. Analysts had predicted profit of 16 million euros.

Infineon shares declined 25 cents to 3.215 euros.

The company sees sales rising at least 10 percent in the 2010 fiscal year. The chipmaker is “thinking about” proposing a dividend for the year ending Sept. 30, 2010, Chief Financial Officer Marco Schroeter said at today’s press conference, adding that it will post a net profit in this fiscal year.

Sales of chips are being helped by an improvement in the market for mobile phones and personal computers. Research firm Gartner Inc. this week said it now expects global semiconductor sales to drop 11 percent in 2009, an improvement from its previous forecast of a 17 percent decline. For 2010, Gartner forecasts a return to the 2008 level.

Sales Advance

Infineon, which provides chips for LG Electronics Inc.’s mobile phones and Apple Inc.’s iPhone, said fourth-quarter sales rose to 855 million euros from 761 million euros in the third quarter.

In January, Qimonda, a spun-off memory chip business in which Infineon held a 77.5 percent stake, filed for insolvency.

Infineon in April cut its 2009 forecast for sales, saying it would drop by as much as 20 percent from fiscal 2008. Since then, Infineon successfully placed debt, sold its Wireline Communications unit to an affiliate of Golden Gate Capital Corp. for 250 million euros, and raised about 725 million euros in a capital increase from shareholders.

The sale of the Wireline unit will lead to a book gain of “at least” 100 million euros in the first quarter, CFO Schroeter said.

In October, STMicroelectronics NV, Europe’s largest chip- maker, said its third-quarter loss narrowed as demand rose and forecast a continued increase in sales, while Texas Instruments Inc., the second-largest U.S. chip-maker, forecast fourth- quarter profit and sales exceeding analysts’ estimates.

To contact the reporters on this story: Ragnhild Kjetland in Frankfurt rkjetland@bloomberg.net; Mariajose Vera at mvera1@bloomberg.net

Last Updated: November 19, 2009 11:56 EST