The Infineon boss promises a higher margin in the current financial year.
(Photo: dpa)
Munich Infineon is growing rapidly and expects good business in the coming months. CEO Jochen Hanebeck increased the forecast this Thursday despite the gloomier economic outlook: the manager now promises an operating margin of 25 percent for the current financial year, one percentage point more than before.
“Even in a weaker macroeconomic environment, significant parts of our business are proving to be robust,” explained Hanebeck. According to Hanebeck, the energy transition and the expansion of electromobility in particular are causing high demand for Germany’s largest chip manufacturer. On the other hand, things are going worse for the semiconductors for smartphones, PCs and data centers.
In the first quarter, sales shot up by a quarter to almost four billion euros. Profit climbed 59 percent to 728 million euros and the operating margin was 28 percent. This is remarkable, because Infineon suffered from unfavorable exchange rate developments. The recently weaker dollar is depressing sales and profitability of the Munich Dax group.
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Although Infineon expects the dollar to be permanently weaker, Hanebeck maintained its sales forecast for the fiscal year (until September 30) of EUR 15.5 billion. This corresponds to an increase of nine percent compared to the previous year.
Investors have been positive about Infineon for some time. Since the beginning of the year, the price has climbed by almost a fifth to a good 33 euros. Infineon did significantly better than the Dax. Analysts also expect further price gains. According to Berenberg expert Tammy Qiu, the important business with the auto industry will develop strongly this year, albeit “at normalized prices and margins”. Qiu expects the price to rise to EUR 40 within a year.
Competitors are dynamic
The most important competitors were also dynamic recently. STMicroelectronics posted fourth quarter revenue up a quarter year over year. The French-Italian rival’s profit has even skyrocketed by two-thirds. And for the current quarter, CEO Jean-Marc Chery again promises sales that will increase by almost 20 percent.
At Dutch competitor NXP, revenues climbed by nine percent in the most recent quarter, and profits increased by around 20 percent. The company from Eindhoven expects a slight decrease in sales in the current quarter compared to 2022.
In the fall, Hanebeck increased the long-term goals. The manager announced that it will generate an operating margin of 25 percent over an industry cycle, six percentage points higher than previously. The semiconductor group is also expected to increase sales by more than ten percent a year on average. So far, the Munich-based company has been aiming for an increase of at least nine percent. At the moment it looks like this is quite achievable.
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