Infineon’s last quarter performance was slightly higher than expected. It is optimistic about the growth of the Chinese market and the recovery of the European market next year.

Infineon Technologies AG, a major global automotive chip manufacturer, announced its last quarter financial results on Tuesday (7th). Although its revenue and profits for the quarter were lower than the same period last year, they were still slightly higher than Wall Street analysts\’ expectations.

Infineon Technologies AG, a global automotive chip maker, announced on Tuesday (7th) its last quarter financial results. Although its revenue and profits for the quarter were lower than the same period last year, they were still slightly higher than Wall Street analysts\’ expectations.
It is worth noting that the company gave mixed financial forecasts and lowered its revenue forecast for fiscal year 2024, but it is optimistic about this quarter (the third quarter). Rising revenue is expected to reverse the decline of two consecutive quarters, which also means that demand from electric vehicle manufacturers is sluggish. The situation is coming to an end.
In addition, the company\’s CEO said that the Chinese market is strong and he is optimistic about the recovery of the European electric vehicle market next year. The optimistic news drove the company\’s stock price to the largest increase in four years that day.
Looking ahead, Infineon estimates that revenue for this quarter (third quarter) will grow to approximately 3.8 billion euros from 3.6 billion euros in the second quarter. Reversing two consecutive quarters of revenue decline means that the sluggish demand from electric vehicle manufacturers is ending.
The company estimates that the full-year revenue for the 2024 fiscal year ending in September this year will be about 15.1 billion euros, plus or minus 400 million euros, which is lower than the 16.31 billion euros in the 2023 fiscal year. The department profit margin is estimated to be about 20%, which is also lower than the same period last year. 27%.
The latest financial forecasts were both lowered. The company had previously estimated that the full-year revenue for this fiscal year would be about 16 billion euros, and the departmental profit margin would be around 20%.
Market analysts pointed out that this is the second time this year that Infineon has lowered its full-year financial forecast for fiscal year 2024 because it is struggling to cope with the slowdown in the growth of the automotive industry.
Citigroup Inc. analysts said in a note on Tuesday that the forecasts point to a bottoming out in declining revenue and margins this fiscal year, consistent with what other chipmakers have already reported.
Electric vehicle makers had mixed results last quarter.
High interest rates, weak economic growth and a lack of charging infrastructure are putting pressure on automakers, with many scaling back plans to transition from internal combustion engines to electric vehicles.
Many European markets are also cutting back on subsidies that have been key to making the new technology affordable.
However, Infineon CEO Jochen Hanebeck said that the company has \”very strong growth momentum\” in China\’s automotive industry and predicted that the electric vehicle market will recover next year, which is expected to push the stock price to the largest increase in four years.
Hannibeck said on the conference call that compared with the U.S. and European markets, China\’s market situation is very strong and accounts for more than half of the company\’s revenue.
However, he is also optimistic about the performance of the European market and believes that the market in the region will begin to recover in 2025.
Infineon\’s shares rose as much as 12% to 36.24 euros per share in Germany on Tuesday, the biggest one-day rise since March 2020.
Analysis points out that China dominates global electric vehicle production Infineon and some peers have said that demand for chips that supply the automotive industry is expected to recover.
But STMicroelectronics NV said last month that the current quarter would be a low point.
The lower-than-expected sales came as Musk\’s Tesla Inc reported its first quarterly sales decline since 2020.
According to the financial report, Infineon\’s second quarter (as of March 31) revenue was 3.63 billion euros in the same period last year, which was 4.12 billion euros, slightly higher than the market estimate of nearly 3.6 billion euros, and net profit was 394 million euros, which was far lower than 826 million euros in the same period last year. Euro, but slightly higher than the market estimate of 379.34 million euros, with department profit margin reported at 19.5%.
Elsewhere, the company\’s second-quarter automotive division sales of 2.078 billion euros were slightly lower than market expectations of 2.08 billion euros, while power and sensing systems division revenue fell to $713 million from 925 million euros in the same period last year.

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