Infineon reports 7 percent revenue growth in Q3
Infineon Technologies AG has reported Q3 results for the third quarter of the 2015 fiscal year, ended June 30, 2015, these are the second since International Rectifier's (IR) lines of business have been included.
"Revenue, earnings and margin rose significantly, despite an increasingly difficult business environment. For the full fiscal year, we therefore continue to forecast revenue and a Segment Result Margin within the ranges previously predicted", stated Reinhard Ploss, CEO of Infineon Technologies AG.
"The integration of International Rectifier is progressing according to plan. Leading technologies and an excellent system understanding differentiate us from the competition, to the benefit of our customers. Therefore we are ideally equipped to take on the challenges of the future."
Third-quarter revenue for the Infineon Group grew by 7 percent to €1,586 million, compared to the €1,483 million reported in the second quarter, corresponding to a rise of €103 million.
A combination of higher revenue and positive cost effects drove the Segment Result up by 24 percent from €198 million in the second quarter to €245 million in the third quarter of the current fiscal year. The Segment Result Margin improved to 15.4 percent, compared with 13.4 percent in the previous quarter.
The negative non-segment result decreased quarter-on-quarter from negative €119 million to negative €126 million. In addition to the acquisition-related depreciation and amortization charges and other expenses already reported in the second quarter, expenses were also recognised in the third quarter in connection with the closure of the Singapore Techview manufacturing facility announced in May.
Operating income improved from €79 million in the second quarter of the 2015 fiscal year to €119 million in the third quarter. Income from continuing operations rose from €65 million to €105 million quarter-on-quarter. Income from discontinued operations amounted to €4 million, compared with €0 million (rounded) in the preceding quarter. Net income for the third quarter came in at €109 million, well ahead of the previous quarter's €65 million.
Earnings per share (basic and diluted) increased from €0.06 in the second quarter to €0.10 in the third. Adjusted earnings per share1 (diluted) improved to €0.18, compared to €0.13 in the second quarter. For the purposes of calculating adjusted earnings per share (diluted), a number of items were eliminated, most notably acquisition-related depreciation and amortization and other expenses as well as expenses related to the closing of Singapore Techview (net of tax).
Investments - which Infineon defines as the sum of purchases of property, plant and equipment, purchases of intangible assets and capitalised development assets - increased to €215 million in the third quarter of the current fiscal year, compared with €150 million in the preceding quarter. Depreciation and amortisation edged up quarter-on-quarter from €203 million to €205 million.
Outlook for Q4
Based on an assumed exchange rate of $1.10 to the euro, Infineon expects quarter- on-quarter revenue growth of 1 percent (plus or minus 2 percentage points) in the fourth quarter of the 2015 fiscal year. At the mid-point of the growth range, the Segment Result Margin is expected to come in at about 16 percent.
Outlook for the 2015 fiscal year
For the 2015 fiscal year, based on an assumed exchange rate of $1.10 to the euro, Infineon forecasts a year-on-year rise in revenue of 34 percent and the Segment Result Margin is expected to be about 15 percent. All four operating segments will contribute to revenue growth.
Investments during the 2015 fiscal year are expected to be in the region of €800 million. This figure includes investments in plant and equipment at existing factories and in intangible assets including capitalized development costs. Specifically included in these investments are €60 to €70 million for readying the second shell in Kulim, Malaysia, for volume production and €21 million for the purchase of Qimonda patents in conjunction with the settlement reached with the insolvency administrator of Qimonda AG. Depreciation and amortisation will increase to around € 750 million, mostly as a result of acquisition-related charges.
