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BERLIN (Reuters) – German chipmaker Infineon said on Tuesday it was launching a cost-cutting program and lowered its revenue forecast for the year due to continued weak demand in the the entire sector.
The company cut its revenue forecast for the year to 15.1 billion euros, plus or minus 400 million euros, from 16 billion euros, plus or minus 500 million euros, previously announcement.
The margin of the annual adjusted result, or “segment result”, was also revised downwards, to around 20%.
However, the group reported a turnover in the second quarter of 3.63 billion euros, slightly above forecasts at 3.60 billion euros, according to a Vara Research consensus, pulling the title to the Frankfurt Stock Exchange.
The stock climbed 9.71% to 35.35 euros at 08:47 GMT.
For Stifel analysts, the lowering of forecasts was in line with expectations.
Those at Jefferies also say they consider “any weakness (in the stock) as an attractive buying opportunity”, due to the strong long-term outlook.
In February, the German company had already reduced its targets for the year, but then planned a recovery in the second half.
CEO Jochen Hanebeck said on Tuesday that many end markets were developing weakly due to the economic situation. Customers and distributors continue to reduce semiconductor inventory levels, with the automotive sector in particular seeing a notable slowdown in growth, he added.
To counter this, Infineon said it is launching measures focused on production, portfolio management, pricing and operating costs. This program is expected to start having a positive effect on the segment result from fiscal 2025, the company said.
Last month, its competitor STMicroelectronics also lowered its revenue forecasts for the whole year.
(Reporting by Christina Amann and Miranda Murray, French version by Gaëlle Sheehan, edited by Kate Entringer)
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