Infineon Reports Slight Increase in Revenue, Earnings in Q3 FY 2024

Infineon Technologies AG is reporting results for the third quarter of its 2024 fiscal year (period ended June 30, 2024).

“In a market environment that remains challenging, Infineon continues to hold up well,” says Jochen Hanebeck, CEO of Infineon. “The recovery in our target markets is progressing only slowly. Prolonged weak economic momentum has resulted in inventory levels in many areas overlaying end demand. In addition to managing the current demand cycle, we are working on further strengthening our competitiveness through the “Step Up” structural improvement program.”

In the third quarter of the 2024 fiscal year, Infineon’s Group revenue improved slightly to €3,702 million, up 2% from the revenue generated in the prior quarter of €3,632 million. The main contributors to this increase in revenue were the Automotive (ATV) and Power & Sensor Systems (PSS) segments.

The gross margin in the third quarter of the current fiscal year rose to 40.2%, compared with 38.6% in the prior quarter. The adjusted gross margin increased to 42.2%, compared with 41.1% in the second quarter.

In the third quarter of the 2024 fiscal year, operating profit improved to €519 million, up from €496 million in the prior quarter. The financial result in the third quarter of the current fiscal year was a net loss of €30 million, compared with a net loss of €12 million in the preceding quarter.

Profit from continuing operations in the third quarter of the 2024 fiscal year increased to €404 million, compared with €394 million in the prior quarter.

Free cash flow improved in the third quarter of the current fiscal year to €393 million from €82 million in the prior quarter. The gross cash position at the end of the third quarter of the current fiscal year was €2,345 million, compared with €2,583 million at the end of the prior quarter. Financial debt decreased from €5,941 million at March 31m, 2024 to €5,386 million at June 30, 2024.

Based on the results for the first three quarters and the outlook for the fourth quarter, Infineon expects to generate revenue of approximately €15 billion in the 2024 fiscal year. In the Automotive segment, revenue growth for the year is expected to be about 3%. The decrease in revenue in the Green Industrial Power segment is expected to be a low-teens percentage figure. The decline in revenue in the Power & Sensor Systems segment compared with the prior fiscal year is forecast to be in the high-teens and in the Connected Secure Systems segment in the mid-twenties percentage range.

Adjusted free cash flow, which is adjusted for investment in large frontend buildings and the purchase of GaN Systems, is expected to be about €1.5 billion, which is about 10% of the forecast revenue for the year. Without the purchase price payment for the acquisition of GaN Systems, reported free cash flow would probably reach approximately €600 million.