NEUBIBERG (dpa-AFX) - Infineon Technologies AG (IFNNY) adjusted its outlook for the 2019 fiscal year revenue and earnings downward, due to continued global economic uncertainties and weaker endmarket demand.
Revenue is now expected to come in at 8.0 billion euros, up from 7.6 billion euros in the 2018 fiscal year, plus or minus 2 percent. The assumed USD exchange rate going forward continues to stand at 1.15. The growth rate of the Automotive and Industrial Power Control divisions should come in above group average, whereas the Power Management & Multimarket division is expected to grow slightly less. For the Digital Security Solutions division revenue is still assumed to decline by a mid-single digit percent rate compared to the previous year.
Business indicators point to a slower demand recovery than expected thus far. A number of endmarkets continue to be sluggish; in particular, the trend of declining vehicle sales in China has accelerated in February, causing dealer inventories to increase sharply. Also, inventories in the broader distribution channel, in particular for Power Management & Multimarket in China have increased.
In the current quarter ending on 31 March, revenue and segment result should come in as expected, i.e. constant revenue compared to the first fiscal quarter, plus or minus 2 percent, with a segment result margin of 16 percent. Despite a continued strong structural growth, we now expect a lower than normal seasonal revenue increase in the second half of the 2019 fiscal year.
Investments will be kept for the time being at the projected level of about 1.5 billion euros. This is predominantly due to business areas where current production capacity continues to be insufficient to satisfy demand, like electro-mobility.
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