Infineon Plans to Cut Spending as Quarterly Sales Top Estimates
Infineon Technologies AG (IFX), Europe’s second-biggest semiconductor maker, plans to reduce spending next year after reporting fourth-quarter sales and operating profit that topped analysts’ estimates.
Operating profit was 116 million euros ($148 million) in the three months ended Sept. 30, beating the 105 million-euro average estimate by analysts compiled by Bloomberg. Sales slipped 1 percent to 982 million euros from the previous three- month period, the Neubiberg, Germany-based company said today. The figure compared with analysts’ estimate of 974 million euros.
Infineon will postpone or cancel some research and development projects as it plans to cut investments by 20 percent to 400 million euros in the current financial year. The chipmaker is curbing the expansion of production sites as weakening demand for cars and personal computers adds to a drop in the market for industrial semiconductors.
Chief Executive Officer Reinhard Ploss, who took over last month after Peter Bauer stepped down for health reasons, has vowed to trim spending while maintaining investments in new technologies that will let Infineon replace more mechanical parts with its chips.
Infineon, whose clients include automaker Bayerische Motoren Werke AG and consumer-electronics company Royal Philips (PHIA) Electronics NV, climbed 3.4 percent to 5.42 euros at 9:19 a.m. in Frankfurt trading. The stock had slumped 9.9 percent this year through yesterday, compared with a 34 percent gain for ASML Holding NV (ASML) and a 4.9 percent decline for STMicroelectronics NV. (STM)
Revenue will drop by a “mid- to high-single digit” percentage rate in the 12 months through September 2013, the company forecast today. For the current quarter Infineon predicts an operating margin of 4 percent to 6 percent of sales.
STMicroelectronics last month announced plans to reduce costs potentially including job cuts. Intel Corp. (INTC), the world’s biggest chipmaker, on Oct. 16 forecast fourth-quarter profit margins below estimates amid slumping demand for personal computers
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