Infineon Shares Plunge as Guidance Confirmation Disappoints
August 03 2023 - 4:02AM
Dow Jones News
By Mauro Orru
Shares of Infineon Technologies slumped in Thursday morning
trading after the German chip maker confirmed its targets for the
year, contrary to expectations of an upgrade following strong
demand for its core automotive and industrial end-markets.
At 0720 GMT, Infineon shares traded 9.2% lower at EUR34.92.
"We and many had been anticipating guidance to be increased,
particularly on the margin," Citi analysts wrote in a note to
clients.
Infineon on Thursday reported revenue of 4.09 billion euros
($4.47 billion) in the three months ended June 30, up 13% on year.
Its automotive business contributed EUR2.13 billion to the
total.
"On the one hand, in electromobility, renewable energy and
related application areas, demand has stayed high. On the other
hand, demand for consumer applications, such as PCs and smartphones
remains low," said Chief Executive Jochen Hanebeck.
Net profit climbed to EUR831 million from EUR517 million.
Infineon's segment result, a key profitability metric, increased to
EUR1.07 billion from EUR842 million, generating a 26.1% margin.
Infineon had guided for revenue of around EUR4 billion, and a
segment result margin of about 26% in its fiscal third quarter.
For its fiscal fourth quarter, Infineon is targeting revenue of
around EUR4 billion, and a segment result margin of around 25%.
Citi analysts noted that revenue guidance is shy of their EUR4.2
billion estimate and Vara consensus of EUR4.1 billion, while
Infineon's segment result margin forecast is also below Citi's
27.9% projection and Vara consensus of 25.8%.
For fiscal 2023, Infineon continues to expect revenue of EUR16.2
billion, and a segment result margin of around 27%.
"Following management's confidence on the last conference call
in May, consistently strong end market data and, most recently,
strong results from global peers across the automotive and
industrial semiconductor group, the bar had been steadily rising
for Infineon into results," Citi analysts said.
Write to Mauro Orru at mauro.orru@wsj.com; @MauroOrru94
(END) Dow Jones Newswires
August 03, 2023 03:47 ET (07:47 GMT)
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