German chipmaker Infineon Technologies AG (IFNNY.PK,IFX) Thursday reported a sharp year-over-year decline in the second-quarter profit, but results improved sequentially, as the company said it has crossed the trough. The stock is climbing nearly 15 percent.
Dr. Reinhard Ploss, CEO of Infineon, said, "Revenues and margin have recovered nicely over the past quarter. The trough is behind us. Our order books are filling up, albeit still with a relatively high proportion of short term business. We therefore expect a further rise in revenue and margin in the current quarter."
Infineon sees third-quarter revenue of around 1 billion euros, with all segments likely to contribute to revenue growth. Segment result margin is forecast at around 10 percent of revenues.
Based on the third-quarter outlook and first-half results, the board expects year-over-year revenue decline in fiscal 2013 at the upper end of the mid-to-high single digit percentage range announced earlier.
The segment result margin for 2013 is expected to be at the upper end of the mid-to-high single digit percentage range guided thus far.
Net income for the second quarter plunged to 33 million euros ($43.4 million) from last year's 111 million euros, but increased from the first quarter's 19 million euros.
Revenues dropped to 918 million euros from 986 million euros, but improved 8 percent from the previous quarter. Segment result margin was 7.4 percent in the quarter, compared to 14.6 percent last year.
Automotive revenue was nearly flat with last year at 424 million euros, but increased 12 percent sequentially as demand returned to more normal levels after pronounced inventory reductions within the supply chain in the first quarter.
Industrial Power Control or IPC revenues fell 17 percent to 144 million euros. Revenue improved from the prior quarter, as demand for industrial drives and major home appliances began to pick up.
Power Management & Multimarket or PMM revenues were unchanged at 227 million euros, but rose 2 percent from the first quarter. According to the chip maker, the normal seasonal decrease and the general weakness in the PC market were more than offset by good business with products used in lighting, servers, tablets and smartphones.
Chip Card & Security or CCS revenues slid 4 percent to 108 million euros but were flat with the last quarter. Revenue in Payment and in Government ID business rose, while revenue generated with SIM-cards fell due to seasonal factors.
The stock is climbing 14.6 percent in early morning trade at 6.66 euros.
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