Infineon Lowers Sales Guidance Again Amid Slow Chip Market Recovery

By Mauro Orru

Infineon Technologies cut its sales forecasts for the year once again after posting sales below analysts' forecasts for its fiscal third quarter as it continues to grapple with lackluster demand for its chips.

The German chip maker said on Monday that it now expects sales of roughly 15 billion euros ($16.37 billion) in the fiscal year to the end of September compared to a previous forecast of about EUR15.1 billion. Its segment result margin--a key profitability measure--is still projected at around 20%.

Infineon booked EUR3.70 billion in sales in the three months to the end of June, down 9% on year. Analysts had forecast EUR3.80 billion in sales for the quarter, according to a Vara Research consensus.

"The recovery in our target markets is progressing only slowly," said Chief Executive Jochen Hanebeck. "Prolonged weak economic momentum has resulted in inventory levels in many areas overlaying end demand."

Lackluster demand had already forced Infineon to cut its annual guidance twice earlier this year.

Net profit slumped 52% to EUR403 million, while its segment result declined to EUR734 million from EUR1.07 billion, generating a 19.8% margin.

Analysts had forecast a profit of EUR447 million and a segment result of EUR717 million on a 18.9% margin.

For the current quarter, Infineon is expecting sales of around EUR4 billion and a segment result margin of about 20%.

Write to Mauro Orru at mauro.orru@wsj.com

(END) Dow Jones Newswires

August 05, 2024 02:09 ET (06:09 GMT)

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