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Infineon Shares Rise as Efficiency Gains Join Sales Jump

Jan. 30 (Bloomberg) -- Infineon Technologies AG, Europe’s second-biggest chipmaker, said productivity is improving faster than projected and forecast that sales will grow in the current quarter. The shares rose the most in more than four months.

Revenue in the three months through March will probably rise by a “mid-single-digit percentage” from the previous quarter, when the company posted sales of 984 million euros ($1.34 billion), the Neubiberg, Germany-based company said in a statement today. Analysts were predicting second-quarter sales of 1.03 billion euros, which would equal a 4.7 percent gain, according to the average of 11 estimates compiled by Bloomberg.

Infineon, which has bet on fields such as car electronics and mobile-device power management for growth, plans to boost investments 72 percent to 650 million euros this year as the global economy improves and production from larger-diameter silicon wafers ramps up. Operating profit before some items, which the company calls segment result, amounted to 11.8 percent of sales during the last quarter, exceeding the company’s guidance of 8 percent to 10 percent.

“Earnings were better than expected, benefiting from the efficiency measures undertaken at our manufacturing facilities,” Chief Executive Officer Reinhard Ploss said in the statement. “Good order intake and positive forecasts for the global economy underpin our outlook: Infineon is poised to profitably grow in 2014.”

Infineon rose as much as 5 percent, the largest intraday jump since Sept. 10, and was trading up 4.7 percent at 7.73 euros as of 9:45 a.m. in Frankfurt. The stock has increased 21 percent in the past 12 months, valuing the semiconductor maker at 8.58 billion euros.

Second-quarter revenue will be propelled by orders for automotive and identity-checking components, Infineon said. The operating margin will probably be 10 percent to 13 percent, according to Infineon. The company retained its full-year forecast.

STMicroelectronics NV, the largest chipmaker in Europe, is targeting a return to profit this year after refocusing on semiconductors used in cars, games consoles and high-end smartphones, CEO Carlo Bozotti said in an interview this week.

To contact the reporter on this story: Cornelius Rahn in Berlin at crahn2@bloomberg.net

To contact the editor responsible for this story: Kenneth Wong at kwong11@bloomberg.net

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