BERLIN: Semiconductor maker Infineon Technologies (IFNNY) reported weaker-than-expected revenue in the third quarter, partly due to slowing smartphone sales. The chip maker, whose customers include Boeing (BA) and Samsung (SSNLF) , also disappointed investors with its outlook.
For the three months through June 30, the Neubiberg, Germany-based company reported revenue of €1.63 billion ($1.82 billion), up 3% year-on-year but below the market consensus of €1.65 billion. Meanwhile, diluted earnings per share came in at €0.19, slightly above the consensus of €0.18.
The chip maker’s revenue jumped 9% year-on-year in the automotive segment and 4% in the industrial power control segment. Sales remained flat in the chip card and security segment, but dropped 2% in its power management and multimarket division, which houses the chips it makes for smartphones.
“The Q3 margin weakness was mainly in the PMM [power management & multimarket] division where slower smartphone sales may have been a factor,” wrote Liberum Capital analyst Janardan Menon. “Revenues were in-line but mix may have been an issue.”
For the fourth quarter, Infineon said it expects quarter-on-quarter revenue growth of 3%, plus or minus 2 percentage points, which implies a range of €1.65 billion and €1.71 billion, compared with a market consensus of €1.68 billion. Infineon’s profit margin forecast fell below some expectations.
Infineon’s shares dropped 3.4% to €14.19 in morning trading. The pace of smartphone growth is expected to halve in 2016 from the previous year. However, the company is also exposed to growing markets, such as automotive and Internet of Things products.
