Infineon Technologies, a prominent German semiconductor manufacturer, has reported a decline in both profit and revenue for the fiscal third quarter, amidst navigating a notably challenging market environment. Despite these setbacks, the company is optimistic about an impending upturn in its business segments for the fourth quarter to meet its full-year outlook. According to the latest financial results shared on Monday, inferring profit attributable to shareholders and hybrid capital investors plummeted to 403 million euros for the three months ending June 30, down from 831 million euros in the same period last year.
Revenue saw a corresponding decline, falling to 3.70 billion euros from 4.09 billion euros. Analysts' consensus estimates forecasted a net income of 528.1 million euros and revenue of 3.79 billion euros, highlighting the broad expectations versus actual performance. However, when compared to the previous fiscal second quarter, revenue for the latest period exhibited a growth of 2%.
This growth was primarily driven by the Automotive segment and the Power & Sensor Systems division, which reported significant gains attributed to robust demand for software-defined vehicles and various components crucial for servers, data centers, USB controllers, and silicon microphones. Nonetheless, the revenue from the Green Industrial Power and Connected Secure Systems segments remained stagnant due to a decline in demand for automation, industrial drives, air conditioning systems, and a weakened Wi-Fi market. Jochen Hanebeck, Chief Executive Officer of Infineon, stated, "The recovery in our target markets is progressing only slowly.
Prolonged weak economic momentum has resulted in inventory levels in many areas overlaying end demand. In addition to managing the current demand cycle, we are working on further strengthening our competitiveness through the 'Step Up' structural improvement program." This strategic initiative is aimed at enhancing the company's market position in an increasingly competitive landscape. Looking ahead, Infineon is forecasting a revenue of 4 billion euros for the fiscal fourth quarter, and anticipates a total revenue of approximately 15 billion euros for the entire fiscal year.
Back in May, the company had projected a full-year revenue target of near 15.1 billion euros, allowing for a variance of 400 million euros. Analysts from Bernstein have noted, "Given the guidance cuts we've seen from STMicroelectronics and other peers, Infineon seems to be navigating the ongoing market softness a bit better than others.
All segments are expected to deliver sequential growth in Q4, led by strong improvements in Power & Sensor Systems and Connected Secure Systems. Auto and Green Industrial Power will likely experience growth rates below the group average, but with all segments growing it looks like Infineon seems to have seen the bottom." As of midday trading in Frankfurt, the stock price stood at $29.18, marking a 2% decline with changes of $-0.51 or -1.72%.
This stock performance reflects investors' cautious sentiment as the company seeks to stabilize and leverage growth opportunities through the anticipated recovery phases in its operational segments..