Infineon Reports Decline in Current Results Longer-Term Growth Drivers Remain
Infineon Technologies AG reported results for the first quarter of the 2020 fiscal year (period ended 31 December 2019), including Q1 FY 2020: Revenue of €1,916 million; Segment Result of €297 million; Segment Result Margin of 15.5 percent.
In addition, the company reported that the Cypress acquisition is expected to close towards the end of the current quarter or at the beginning of the following quarter.
"Our well-diversified business performed robustly at the beginning of the fiscal year. Under difficult conditions, revenue fell in line with expectations. Our cost reduction measures are beginning to take effect. Those measures and several non-recurring factors caused the Segment Result to come in slightly better than expected," said Dr. Reinhard Ploss, CEO of Infineon.
"Demand for the latest generation of our silicon microphones is growing dynamically. We are also seeing signs of improvement in individual areas such as the server business. Overall, however, we do not expect to see a broad based recovery of demand before the second half of the fiscal year. Our long-term growth drivers remain intact and we are making a crucial contribution to shaping the future of mobility and energy efficiency," concluded Dr. Ploss.
Outlook for FY 2020: Based on an assumed exchange rate of US$1.13 to the euro, revenue still expected to grow at 5 percent year-on-year (plus or minus 2 percentage points), with Segment Result Margin of about 16 percent at mid-point of revenue guidance. Investments of around 1.3 billion euros planned. Free cash flow in range of €500 to €700 million anticipated.
Outlook for Q2 FY 2020: Based on an assumed exchange rate of US$1.13 to the euro, quarter-on-quarter revenue growth of 5 percent (plus or minus 2 percentage points); Segment Result Margin of about 14 percent predicted at mid-point of revenue guidance.
