German semiconductor maker Infineon Technologies AG (IFX: Quote, IFNNY) Thursday reported a sharp decline in profit for the first quarter, as revenue dropped 10 percent from the prior year on expected lines. The chipmaker backed its full-year revenue outlook.
Net income attributable to the company's shareholders plunged to 19 million euros from 96 million euros in the previous year. Earnings per share fell to 0.02 euros from 0.09 euros. In the preceding fourth quarter, net income attributable to the company's shareholders totaled 138 million euros or 0.13 euros per share.
Revenue for the quarter declined to 851 million euros from 946 million euros in the prior year and was lower than 982 million euros generated in the preceding quarter.
Dr. Reinhard Ploss, CEO, said, "Revenue and earnings are in line with our expectations and cost saving measures are beginning to take effect. As long as the global economy does not stall, business should continue to pickup as expected."
Segment result for the quarter plunged 69 percent to 44 million euros and segment result margin was 5.2 percent compared to 14.9 percent last year.
Infineon had said in November 2012 that it expected decrease in first-quarter revenue by a low teens percentage compared to the prior-year quarter. All segments were expected to report lower revenue with margin anticipated to be between 4 and 6 percent of revenue.
Business wise, Automotive revenues fell 4 percent in the quarter to 377 million euros, amid adjustments in stocking levels in the automotive supply chain towards the end of the calendar year.
Industrial Power Control revenues dropped 30 percent to 138 million euros, reflecting generally weak demand across all markets and particularly cautious buying by distributors in Asia.
Power Management & Multimarket revenues were flat with last year, while Chip Card & Security revenues climbed 11 percent to 108 million euros.
Looking ahead to the second quarter, the company expects revenue to increase by a mid single digit percentage, despite the weakness of the US dollar. Segment result is estimated to be slightly up in absolute terms compared to the previous quarter.
Infineon has adjusted its assumed exchange rate from US dollar 1.25 to US dollar 1.30 to the euro. Despite the negative impact of this adjustment, the company continues to see full-year revenue decreasing by mid-to-high single digit percentage compared to last year.
Segment result margin for the year is expected to remain at a mid-to-high single digit percentage of revenue despite headwinds from euro/US dollar exchange rate.
The stock closed at 6.39 euros on Wednesday.
by RTT Staff Writer
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