Infineon Q3 Results Drop, Cuts FY24 Revenue Outlook, To Cut Jobs; Stock Up

(RTTNews) - German semiconductor maker Infineon Technologies AG on Monday trimmed its fiscal 2024 revenue outlook and maintained margin view after reporting lower profit and revenues in its third quarter amid weak environment. The company further issued sequentially higher revenue and margin outlook for its fourth quarter.

Further, Reuters reported citing Jochen Hanebeck, CEO of Infineon, that the company will cut 1,400 jobs worldwide and relocate a further 1,400 positions to countries with lower labour costs.

In Germany, Infineon shares were trading at 30.39 euros, up 2.9 percent.

In its earnings statement, Hanebeck said, "In a market environment that remains challenging, Infineon continues to hold up well. The recovery in our target markets is progressing only slowly. Prolonged weak economic momentum has resulted in inventory levels in many areas overlaying end demand. In addition to managing the current demand cycle, we are working on further strengthening our competitiveness through the "Step Up" structural improvement program."

Looking ahead for the fourth quarter, the company projects revenue of around 4.0 billion euros, and Segment Result Margin at around 20 percent. It is anticipated that revenue will increase in all four segments sequentially.

For fiscal 2024, the company projects revenue to be around 15.0 billion euros. While announcing the second quarter results, the company expected revenues to be around 15.1 billion euros plus or minus 400 million euros

The adjusted gross margin is still forecast to be in the low-forties percentage range and the Segment Result Margin to be around 20 percent.

In the Automotive segment, revenue growth for the year is expected to be about 3 percent. Meanwhile, the decrease in revenue in the Green Industrial Power segment is expected to be a low-teens percentage figure, and the drop in revenue in the Power & Sensor Systems segment is forecast to be in the high-teens. The decline would be in the mid-twenties percentage range in the Connected Secure Systems segment.

In its third quarter, profit fell 52 percent to 403 million euros from last year's 831 million euros. Earnings per share from continuing operations was at 0.30 euro, down from last year's 0.63 euro.

Adjusted profit attributable to shareholders was 557 million euros, compared to 887 million euros a year ago. Adjusted earnings per share were 0.43 euro, compared to 0.68 euro in the prior year quarter.

Segment Result dropped 31 percent from last year to 734 million euros, and Segment Result Margin dropped to 19.8 percent from 26.1 percent a year ago.

Infineon's Group revenue dropped 9 percent to 3.70 billion euros from prior year's 4.09 billion euros. Sequentially, Group revenue improved 2 percent.

Revenue in the Automotive segment was 2.11 billion euros, down 1 percent from last year, and its Segment Result Margin fell to 25.4 percent from 27.4 percent a year ago.

The revenues were down 16 percent in Green Industrial Power Segment, 18 percent in Power & Sensor Systems Segment and 23 percent in Connected Secure Systems Segment.

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