Infineon thrives on cars, hikes outlook
By Nicola Leske
FRANKFURT (Reuters) - Infineon's (IFXGn.DE: Quote) decision to exit the wireless business to focus on chips for cars and energy efficiency has paid off, helping the German group produce strong second-quarter results and raise its full-year outlook.
Infineon, spun off from engineering group Siemens (SIEGn.DE: Quote) more than a decade ago, last year chose to exit the mobile chip business by selling its wireless chip unit to Intel (INTC.O: Quote) for $1.4 billion.
Infineon decided to focus on its three core businesses -- automotive, industrial & multimarket and chip card security -- and is now reaping the benefits of a recovery in the car sector.
"Thanks to our concentration on future oriented areas such energy efficiency, mobility and security... we stand on solid footing," Chief Executive Peter Bauer said during a conference call on Tuesday.
"We stand to profit from the advent of electromobility and the aggressive push for renewable energy," Bauer said.
Infineon chips are found in two out of three cars worldwide, used for anything from fuel injection to power management for electric cars. The autos segment generates almost 40 percent of group sales and was up 24 percent from a year earlier.
Carmakers such as Volkswagen (VOWG_p.DE: Quote) have reported stellar results thanks to rising demand in emerging markets.
Infineon reiterated that revenue and operating margin in the current quarter will be on par with the second quarter. Continued...