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Infineon Technologies returns to profitability in 1Q

Infineon Technologies returns to profitability in 1Q

Chipmaker Infineon Technologies AG reported a return to profitability in its first quarter on Monday as higher earnings at its memory chip business offset losses at its wireless chip business.
The Munich-based company reported a net profit of euro120 million (US$154.81 million) for the first quarter, compared with a net loss of euro183 million in the same quarter last year.
Sales in the three months to Dec. 31 rose 27 percent to euro2.12 billion (US$2.74 billion).
The profit beat the forecasts of analysts polled by Dow Jones Newswires, who had expected the company to report earnings of euro100 million (US$129.01 million) on sales of euro2.28 billion (US$2.94 billion).
Infineon, one of Europe's largest chipmakers, said that it expects fiscal second-quarter sales and earnings before interest and taxes to be at least at the same level as the first quarter, excluding its memory chip business.
"In a challenging operating environment, results for the first quarter came out better than originally expected," CEO Wolfgang Ziebart said in a statement.
He said the company expected to return to revenue growth in its automotive, industrial and multimarket division in the second quarter.
Thomas Hofmann, an analyst at Landesbank Baden-Wuerttemberg, said he interpreted Infineon's outlook as positive as it guides to a possible return to growth in the second quarter, while also signaling that restructuring charges at its wireless chip unit will be below earlier guidance.
Infineon shares rose 0.8 percent to euro11.18 (US$14.45) in Frankfurt trading.
The company said communication chip sales fell 29 percent to euro236 million (US$304.46 million)from euro334 million. It was the first quarter that Infineon booked virtually no sales from BenQ Mobile, which used to be its largest wireless chip customer before it went insolvent.
Infineon's largest unit Qimonda AG, in which it still owns an 86 percent stake following a separate listing on the New York Stock Exchange in August, is one of the world's largest memory chip makers.
It announced last week that it posted a net profit of euro177 million (US$228.35 million) in the three months ended Dec. 31, compared with a loss of euro127 million in the year-earlier quarter, as sales jumped 73 percent to euro1.17 billion (US$1.51 billion) from euro678 million.


Updated : 2021-02-27 15:42 GMT+08:00