Tech and Science News
Germany's Infineon quarterly sales flat, maintains full-year revenue guidance
FRANKFURT (Reuters) - German chipmaker Infineon Technologies AG on Tuesday maintained its full-year revenue forecast, which it had cut twice earlier, as it reported flat second-quarter sales in line with its most recent guidance.
The company that makes power chips used in cars, server farms and smartphones still expects revenue of 8 billion euros ($8.97 billion), plus or minus 2 percent, in the year to Sept. 30. That would represent a 5 percent gain from a year earlier.
Munich-based Infineon, despite its record of outgrowing the market, has lowered its revenue and margin guidance for this year twice, with a slowdown in the Chinese auto market in particular sapping demand and causing inventories to pile up.
“The boom is over for the time being, the momentum in demand has weakened,” Chief Executive Reinhard Ploss said in a statement, adding that management had taken cost-cutting steps, while pressing ahead with strategic investment projects.
Infineon did meet the guidance it gave for second-quarter revenues on March 27 - four days before the end of the period - of flat revenue while the segment result margin of 16.7 percent was slightly better than it had flagged.
It forecast on Tuesday that third-quarter revenues would grow by 1 percent, sequentially, but said segment margin - management’s preferred measure of operating profitability - would compress further to 15 percent.
Overall, segment margin should come in at 16 percent in the year as a whole, the company said.
Shares in Infineon slumped after the March outlook cut but have since rallied hard with other tech stocks to stand 18 percent up for the year, leading some analysts to worry that valuation gains are not supported by fundamentals.
Reporting by Douglas Busvine; editing by Thomas Seythal and Rashmi Aich
Our Standards:The Thomson Reuters Trust Principles.