Although reporting sharp declines from last year, Infineon Technologies AG, Munich, Germany, surprised Wall Street analysts today by posting a profit in the second quarter of its fiscal year.
Infineon posted net income of $20.7 million, or 4 cents per share in the quarter ended March 31, a decline of 84% from the $131.8 million, or 22 cents per share, that the company reported in the same period last year. Analysts expected the company to break even, according to Market Guide.
Revenue increased 7.6% to $1.48 billion for Infineon in its second quarter, compared to revenue of $1.38 billion in the same period last year. Analysts expected the company to report revenue of $1.6 billion, according to Market Guide.
Infineon blamed the decline on the weak prices for chips and the slowdown in the mobile handsets market. The company said it has cut spending for the year as a response to market conditions.
"Infineon maintained strong margins in its non-DRAM businesses - Wireline Communications, Security & Chip Card ICs and Automotive & Industrial - despite a difficult market environment due to continued demand in these segments, further productivity gains and new high-margin products," said Ulrich Schumacher, president and chief executive of Infineon, in a statement.
"Furthermore, our strategy to optimize our product portfolio by building on these businesses is showing positive results as they help to counterbalance the current weakness in the memory market."