BERLIN German chipmaker Infineon reported forecast-beating third-quarter revenue on Tuesday, sending its shares higher as CEO Reinhard Ploss said that the worst of the auto industry slump had passed.
Shares in Munich-based Infineon rallied by 4.6% as revenue increased 9% from the prior quarter to 2.174 billion euros ($2.56 billion), while segment result margin, the company’s preferred measure of profitability, narrowed to 10.1% from 13.8%.
Infineon reported a net loss in a quarter that was skewed by the closing in mid-April of its $10 billion takeover of U.S. peer Cypress Technologies.
But Citi analyst Amit Harchandani highlighted a beat of 3% on quarterly revenue and 4% on full-year guidance – despite headwinds from the weakening dollar – as supportive to Infineon stock.
“The pandemic continues to have a significant impact on our target markets, resulting in weaker demand in many product areas,” Ploss said.
“Thankfully, we are seeing concrete signs of recovery within the automotive sector, which has been particularly hard hit.”
Stripping out the benefit of the Cypress acquisition, Infineon’s core automotive division suffered a revenue decline of 25% in the third quarter, Ploss said, putting the development in line with the car industry as a whole.
Infineon forecast revenue of 2.3-2.6 billion euros in the fiscal fourth quarter to Sept. 30, when it will fully consolidate Cypress for the first time. At the midpoint it sees the segment result margin at 14%.
For fiscal 2020, Infineon forecast revenue of around 8.5 billion euros and a segment result margin of 13%.
($1 = 0.8501 euros)
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