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Infineon’s Q3 Largely Dominated by Automotive, Renewables and Power Conversion

Infineon TechnologiesInfineon Technologies has disseminated its third quarter results (period ended June 30, 2016) of its 2016 fiscal year.

The German Semiconductor giant reports that it has gained from €1,611 to €1,632 million quarter-on-quarter.

Contributions to this 1 percent revenue growth were made by the Automotive (ATV), Industrial Power Control (IPC) and Power Management & Multimarket (PMM) segments. As expected, revenue reported by the Chip Card & Security (CCS) segment decreased slightly.

“Revenue, earnings and margin all increased in line with expectations in the third quarter. Demand was particularly strong for our automotive electronics, renewables and power supply solutions. Despite the current contraction of the semiconductor market and contrary to many of our competitors, Infineon has grown once again compared to the prior year’s corresponding quarter, reflecting its focus on sub-markets with structural growth. We therefore continue to forecast a long-term compound annual growth rate of 8 percent,” stated Dr. Reinhard Ploss, CEO of Infineon. “We are enabling cleaner and safer cars, greener energy and even faster mobile communication. The planned acquisition of Wolfspeed will secure us a decisive technological advantage in the long term and help us grow our system understanding. We are thereby focusing on promising growth areas such as electromobility and the Internet of Things.”

The gross margin is sought to have improved quarter-on-quarter from 35.1 percent to 36.6 percent.

Segment Result increased by 11 percent from €228 million to €254 million quarter-on-quarter.

The Segment Result Margin for the third quarter improved to 15.6 percent, compared with 14.2 percent in the preceding quarter.

The non-segment result for the three-month period was a net loss of €61 million, compared with a net loss of €54 million in the previous quarter.

Net income increased from €180 million to €186 million quarter-on-quarter.

The figure for the second quarter included €21 million of tax income, compared with €3 million recorded in the third quarter. Tax income primarily results from the reduction of deferred tax liabilities relating to the acquisition of International Rectifier and from the revaluation of deferred tax assets relating to German and foreign entities.

Third-quarter depreciation and amortization decreased slightly to €206 million, compared with €213 million in the preceding quarter.

In the fourth quarter of the 2016 fiscal year, Infineon expects quarter-on-quarter revenue growth of 3 percent (plus or minus 2 percentage points). This forecast is based on an assumed exchange rate of US$1.10 to the euro. At the mid-point of the forecast revenue range, the Segment Result Margin is expected to come in at 17 percent.

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