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Infineon Stock Falls After Flat Quarter, Slow Progress With Supply Chains

Published 05/09/2022, 04:58 AM
Updated 05/09/2022, 05:20 AM
© Reuters.

By Geoffrey Smith 

Investing.com -- Infineon (ETR:IFXGn) stock fell 3.1% by mid-morning in Germany on Monday, after the country's biggest chipmaker warned of "an increasingly challenging environment", acknowledging that it continues to be plagued by persistent supply chain problems. 

"Demand for our products and solutions continues to exceed supply significantly," said chief executive Jochen Hanebeck in a statement accompanying the results for the company's fiscal second quarter ending in March. "We are closely monitoring short- and medium-term market and supply conditions in order to be able to respond in case of need."

The warnings overshadowed the fact that Infineon's results came in slightly better than expected, and that it also raised its guidance for full-year operating margins and revenue. As those two things were driven first and foremost by exchange rate factors, they aren't taken as reflecting any underlying improvement in the company's performance.

By 5:15 AM ET (0915 GMT), Infineon stock was down 3.5%, testing the 18-month low that they hit in March. The stock has fallen some 40% from its peak late last year but is still up nearly 50% from before the pandemic. 

Infineon said revenue in the three months through March was up 4% on the quarter and up 22% on the year. Adjusted diluted earnings per share rose 88% to 44 euro cents from 24c a year earlier. Profit from continuing operations, however, only edged up to 469 million euros from 457 million a year earlier. 

The company nudged up its full-year revenue forecast to 13.5 billion, as it revised down its forecast for the average EUR/USD exchange rate to $1.10 from $1.15. The war in Ukraine has pushed the euro to a series of multi-year lows in recent days. It briefly fell back below $1.05 again on Monday before recovering slightly to trade at $1.0515 by 5:15 AM ET.

The same factors also led Infineon to revise up its free cash flow forecast for the year to 1.1 billion euros from 1.0 billion previously. The group's core operating margin is now seen at above 22%, up from a previous estimate of around 22%.




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