IFNNY Infineon Technologies AG (QX)

   By Mauro Orru 
 

Infineon Technologies AG said Tuesday that it swung back to a net profit in the third quarter of fiscal 2021, while revenue continued its ascent as demand for chips shows no signs of abating amid a global supply shortage.

The German chip maker posted a net profit for the three months ended June 30 of 245 million euros ($290.9 million), compared with a net loss of EUR128 million a year earlier.

Revenue for the quarter climbed to EUR2.72 billion from EUR2.17 billion. However, coronavirus-related constraints on manufacturing capacity in Malaysia, and the aftermath of the winter storm in Texas held back revenue growth, harming its automotive, and power and sensor systems segments.

The company's segment result--a closely watched metric comparable to adjusted earnings before interest and taxes--rose to EUR496 million from EUR220 million, with its segment result margin, or adjusted EBIT margin, up to 18.2% from 10.1%, it said.

Infineon in May had guided for third-quarter revenue between EUR2.6 billion and EUR2.9 billion, with adjusted EBIT margin at around 18% at the midpoint.

"Demand for semiconductors is unbroken," Chief Executive Reinhard Ploss said. "Inventories are at a historic low; our chips are being shipped from our [fabrication plants] straight into the end applications," he added.

For the fourth quarter, the company said it expects revenue of around EUR2.9 billion, with adjusted EBIT margin at around 19%. However, it cautioned that revenue at its automotive, and industrial power control segments will likely remain at a similar level to the previous quarter citing restrictions in Malaysia.

Infineon slightly tweaked its guidance for the fiscal year, and now expects revenue of around EUR11 billion. It had previously guided for revenue of around EUR11 billion, plus or minus 3%. Its adjusted EBIT margin should come in above 18%.

Mr. Ploss said the company is continuously building up capacity to tackle what he described as an "extremely tight supply situation."

The company is investing around EUR1.6 billion this year in properties, plants, equipment, intangible assets and capitalized development costs.

"Under these circumstances, any pandemic-related restrictions on manufacturing, such as those recently imposed in Malaysia, are especially grave. We are doing our utmost to improve matters along the entire value chain," he added.

Write to Mauro Orru at mauro.orru@wsj.com; @MauroOrru94

(END) Dow Jones Newswires

August 03, 2021 03:16 ET (07:16 GMT)

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