Infineon Technologies AG
) reported second-quarter fiscal 2014 earnings on Apr 29.
Quarterly earnings came in at €0.11 (15 cents). The earnings
increased 37.5% sequentially and rose 266.6% year over year and
also surpassed the Zacks Consensus Estimate of 9 cents per
Infineon's persistent efforts to tap the immense market
potential drove earnings in the quarter. However, the news failed
to cheer the investors as the company's shares dipped 2.2% to
Revenue for the first quarter increased 7% sequentially and
14% year over year to €1,051 million ($1,440.37 million). It also
beat the Zacks Consensus Estimate of $1383 million. The top line
was primarily driven by the strong performance of the company's
Automotive and Industrial Power Control segments.
Revenues by Segments
revenues amounted to €484 million ($663.31 million) in the second
quarter, increasing 14% from €424 million ($581.08 million) in
the prior quarter. The growth was driven by strong global demand
for vehicles, especially for the premium wins from the German car
In the reported quarter,
Industrial Power Control
segment revenues surged 28% year over year to €185 million
($253.54 million) in the second quarter of 2014. The increase was
primarily attributable to the increasing demand for the company's
industrial drives and traction solutions.
Power Management and Multimarket
segment revenues were €252 million ($345.36 million) in the
quarter, marking a year-over-year increase of 11%. The segment
benefited from the strong demand for its power transistors and
cellular network infrastructure applications.
Revenues in the
Chip Card and Security
totaled €121 million ($165.83 million), reflecting a
year-over-year increase of 12%. The improvement in both Security
ICs as well as Government IDs drove the segment results.
Income from continuing operations in the quarter increased to
€114 million ($156.23 million), compared with €85 million
($116.49 million) in the previous quarter.
Balance Sheet and Cash Flow
The company's cash and cash equivalents declined to €327
million ($448.15 million), compared with €472 million ($646.87
million) as on Dec 31, 2013. Free cash flow from continuing
operations increased sequentially from €30 million ($41.11
million) to €51 million ($69.89 million).
Following the earnings for the second quarter, the company
issued guidance for the third quarter of 2014. For the quarter,
revenues are expected to increase between 4-8%, whereas the
Segment Result Margin is expected to come in between 14% to
Infineon reiterated its outlook for full fiscal-year 2014. For
fiscal-year 2014, Infineon expects revenues to increase in the
range of 7% and 11% while it expects Segment Result Margin
between 11% and 14%. The company plans to invest as much as
€650 million ($890.81 million) in this fiscal going forward.
Infineon currently has a Zacks Rank #2 (Buy). Some other
companies operating in the same industry worth consideration
PLX Technology Inc.
Advanced Semiconductor Engineering Inc.
). While PLX Technology and Rambus have a Zacks Rank #1 (Strong
Buy), Advanced Semiconductor Engineering carries the same rank as
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