Infineon Technologies Expects Slower Sales Growth in Fiscal Year 2024
Infineon Technologies, a leading German chip maker, foresees a slower pace of sales growth in its new fiscal year compared to the previous year. The company is facing weaker demand for chips in personal electronic devices, such as computers and smartphones.
For the year ending in September 2024, Infineon aims to achieve approximately €17 billion ($18.50 billion) in revenue, exceeding the €16.31 billion reported for fiscal 2023. However, its segment result margin, a crucial profitability metric, is expected to be around 24%, falling short of the 27% reported for fiscal 2023.
According to research notes from Citi and UBS analysts, Infineon's guidance aligns with expectations. The company continues to experience strong demand for semiconductors from the automotive industry, driven by its commitment to electric vehicles.
Infineon anticipates that its automotive business will propel revenue growth, with sales projected to increase in the low double-digit percentage range. In contrast, its green industrial power segment is expected to maintain stable revenue at a rate of 23%. These two sectors are expected to compensate for a high single-digit percentage decline in sales in the power-and-sensor systems and connected secure systems divisions.
Jochen Hanebeck, the Chief Executive of Infineon Technologies, affirms that structural semiconductor growth remains steady in the areas of renewable energy, electromobility (especially in China), and microcontrollers for the automotive industry. Meanwhile, consumer, communication, computing, and IoT applications are experiencing a temporary period of low demand.
Infineon Reports Strong Performance in Q3
Infineon, a leading semiconductor company, released its financial results for the three months ending in September. It reported a revenue of EUR4.15 billion, slightly higher than the EUR4.14 billion generated in the same period last year. The automotive division emerged as the standout performer, contributing EUR2.16 billion to the overall sales, a 12% increase compared to the previous year. However, the power and sensor systems division experienced a decline in revenue of 22%, reaching EUR912 million.
Analysts from Citi acknowledged the automotive division's resilience, stating that automotive power semiconductors are proving to be robust. This sentiment was echoed by STMicroelectronics, another chip maker, which also experienced revenue growth in its automotive division despite weaker sales in personal electronics.
Infineon's net profit increased from EUR735 million to EUR753 million. However, its segment result slightly decreased from EUR1.06 billion to EUR1.04 billion, resulting in a margin of 25.2%.
Prior to the release, analysts had predicted revenue of EUR4.04 billion, a net profit of EUR674.8 million, and a segment result of EUR1.01 billion. Infineon exceeded these expectations.
The company also achieved its annual revenue and segment result margin targets for fiscal year 2023. As a result, it proposed a dividend of EUR0.35 per share, up from EUR0.32 in fiscal year 2022.
Following the positive financial report, Infineon shares soared more than 7% during early afternoon trading.
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