German semiconductor maker Infineon Technologies AG (IFX, IFNNY) Wednesday reported a higher fourth-quarter profit, despite lower revenues, as the prior-year comparison reflected a loss from discontinued operations. Looking ahead to the first quarter and fiscal year 2013, the company expects decrease in revenue compared to the prior-year.
The company noted that worldwide economic slowdown had the greatest effect on demand for power semiconductors for use in industrial, computing and consumer applications. In addition, high public-sector debt levels in Europe made customers increasingly cautious in their spending.
Infineon said it is implementing various cost-cutting measures. It has reduced its fiscal 2013 budgeted investment to about 400 million euros from 500 million euros.
For the fourth quarter ended September 30, the company posted net income of 138 million euros, higher than 125 million euros in the previous year. On a per share basis, earnings increased to 0.13 euros from 0.11 euros per share a year ago.
For the quarter, the company recorded an income from discontinued operations of 9 million euros, compared to a loss from discontinued operations of 122 million euros last year. Operating income nearly halved to 87 million euros from 179 million euros in the prior year.
Revenues for the quarter declined 5 percent to 982 million euros. Segment Result plunged 41 percent to 116 million euros. "In addition to lower revenue, Segment Result was also negatively affected by rising production and operational costs," the company added.
For fiscal 2012, the company's net income plunged to 427 million euros or 0.39 euros per share from 1.12 billion euros or 0.98 euros per share in the preceding year. Group revenue declined 2 percent to 3.90 billion euros.
Looking ahead to the first quarter of fiscal 2013, the company expects decrease in revenue by a low teens percentage compared to the prior-year quarter. All segments are expected to report lower revenue. Segment result margin is anticipated to be between 4 and 6 percent of revenue.
For fiscal 2013, Infineon forecasts a reduction in revenue compared to the previous fiscal year by a mid-to high-single digit percentage rate. The company said its outlook is based on the assumption that revenue will remain at reduced levels in the first half of the year and will improve considerably in the second half.
Reinhard Ploss, CEO of the company stated, "The sovereign debt crisis on the one hand and a slowdown in economic growth in Asia on the other have had an adverse impact on the global economy. Despite these economic headwinds, Infineon has performed well in the 2012 fiscal year and we have achieved our targets."
The company also said its management board will propose an unchanged dividend of 0.12 euros per share for the 2012 fiscal year.
On Frankfurt's Xetra, Infineon shares are currently trading at 5.43 euros, up 3.61 percent on a volume of 3 million shares.
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