Infineon Technologies AG today reported results for the third quarter of its 2017 fiscal year (period ended 30 June 2017). Revenue in Q3 was €1,831 million; Segment Result €338 million; Segment Result Margin 18.5 percent; earnings per share €0.22 (basic and diluted); adjusted earnings per share €0.24 (diluted); gross margin 38.2 percent, adjusted gross margin 39.4 percent.
At an assumed exchange rate of US$1.15 to the euro expected revenue about the same level as Q3 FY 2017; Segment Result Margin at around 18 percent. And despite significant headwind from the weaker US dollar in the September quarter, year-on-year revenue growth of 8 to 11 percent; Segment Result Margin of 17 percent at mid-point of revenue guidance
"Our forecast has been fully confirmed. The pace of growth in the third quarter was in line with expectations," said Dr. Reinhard Ploss, CEO of Infineon. "Demand is particularly strong for the power semiconductors we produce for various applications ranging from renewables to data centers. The market for electro-mobility also continues to accelerate.
"During the nine-month period ended June 2017 we acquired almost twice as much new business in this area for the coming five to ten years as in the entire previous fiscal year. Infineon is a leader in IGBTs for hybrid and electric cars, a technology which will prevail in this application for years to come. We are further expanding our strong position in this market. Overall, we confirm our outlook for the current fiscal year, despite strong headwinds caused by the weaker US dollar," continued Dr. Ploss.
In the third quarter of the 2017 fiscal year, revenue grew by 4 percent from €1,767 million to €1,831 million quarter-on-quarter. The Industrial Power Control (IPC), Power Management & Multimarket (PMM) and Chip Card & Security (CCS) segments all contributed to revenue growth, whereas revenue reported by the Automotive (ATV) segment was slightly down.
The third-quarter gross margin was 38.2 percent, compared with 36.5 percent in the previous quarter. These figures include acquisition-related depreciation and amortization as well as other expenses attributable to the International Rectifier acquisition totaling €20 million. The adjusted gross margin came in at 39.4 percent, up from 38.0 percent one quarter earlier.
Segment Result increased by 14 percent from €296 million to €338 million quarter-on-quarter. The Segment Result Margin improved to 18.5 percent, compared with 16.8 percent in the previous quarter.
The non-segment result in the third quarter was a net loss of €40 million, compared with a net loss of €67 million reported for the second quarter. Of the third-quarter figure, €21 million related to the cost of goods sold, €20 million to selling, general and administrative expenses and €0 million to research and development expenses.
In addition, other operating income and other operating expenses were a net positive amount of €1 million. The non-segment result for the second quarter included among others significant expenses arising in conjunction with the termination of the planned acquisition of Wolfspeed.
The non-segment result for the third quarter includes €35 million of depreciation and amortization charges arising in conjunction with the purchase price allocation and other expenses for post-merger integration measures relating to the acquisition of International Rectifier.
Operating income in the third quarter of the current fiscal year increased to €298 million, compared with €229 million in the previous quarter. Income from continuing operations improved from €198 million to €250 million quarter-on-quarter. Income from discontinued operations amounted to €3 million, compared with income of €1 million in the preceding quarter. Net income for the three-month period improved from €199 million to €253 million.
Earnings per share for the third quarter of the current fiscal year increased to €0.22, up from €0.18 one quarter earlier (in both cases basic and diluted). Adjusted earnings per share1 (diluted) amounted to €0.24, compared with €0.21 in the previous quarter. For the purpose of calculating adjusted earnings per share (diluted), a number of items are eliminated, most notably acquisition-related depreciation/amortization and other expenses (net of tax) as well as valuation allowances on deferred tax assets.