German semiconductor company Infineon Technologies AG (IFNNY.PK) reported Thursday lower profit for the second quarter, hurt by slightly lower revenues and sharply lower margins. Stating that the profit margin was better than its expectations, the automotive chipmaker lifted its revenue and margin forecast for the full year.
Profit margin for its segments as a whole came in at 14.6 percent, down from 20.3 percent a year ago. The company noted this was roughly in line with the 15 percent target margin over the economic cycle. Second-quarter revenues dropped 1 percent to 986 million euros.
For the third quarter, Infineon projects broadly flat revenues and margins. For fiscal 2012, the company now forecasts revenue will only fall by a low single-digit percentage rate from last year, which is better than the previous forecast of a decline of mid-single-digit percentage rate.
Profit margin for the year is now expected to be at mid-teens percentage, in comparison to previous estimate of low to mid-teens percentage margin.
In the second-quarter, profit attributable to shareholders plunged 81 percent to 111 million euros from 572 million euros last year.
Excluding discontinued operations, earnings per share from continuing operations fell 33 percent to 109 million euros or 0.10 euros per share.
Segment wise, Automotive segment revenues grew 8 percent and Chip Card & Security segment revenues increased 5 percent. Meanwhile, Industrial Power Control's revenues fell 9 percent year-over-year and 11 percent sequentially as demand in all industrial sectors was weak owing to the late-cycle nature of this business. Power Management & Multimarket segment's revenues also dropped 6 percent.
On a sequential basis, the German firm's net income climbed 16 percent and revenues grew 4 percent even though sales volume in the company's addressable market (i.e., semiconductor industry revenue excluding memory chips and microprocessors) contracted 1 percent.
Commenting on the sequential performance, CEO Peter Bauer said, "Business was better in the second quarter than expected. Three out of four segments increased revenue. Our focus on key challenges for today's society - energy efficiency, mobility and security - is also proving its worth during difficult economic times."
Infineon shares are currently trading at 7.45 euros, down 0.04 euros or 0.51 percent on Frankfurt's Xetra.
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