Germany's Infineon Technologies AG – which sold of its wired and wireless communications businesses a few years ago – is reaping he benefit of its focus on automotive, industrial and power.
The company has reported sales of €1,051 million (about $1,450 million) for its second fiscal quarter ended March 31, 2014, up 14 percent from the same quarter a year before and up 7 percent sequentially. The company has four main operating divisions – automotive, industrial, power and multimarket components, and chips for smartcards and security. All four contributed to growth and sharply increased profitability.
The company reported a net income of €124 million (about $170 million) about four times the net income of the same quarter a year before.
The outlook is even brighter according to CEO Reinhard Ploss. The revenue in the third fiscal quarter is expected to grow by between 4 and 8 percent and revenue for the 2014 fiscal year is expected to be at least at the upper end of the guidance of 7 to 11 percent annual growth. Revenue growth in the 2014 fiscal year is mainly driven by automotive and industrial power control sales.
"Demand for our products is strengthening and our order books are filling up nicely. Thanks to our prior investments, we are in a favorable position to outgrow the market in this fiscal year," Ploss said in a statement.
The automotive division was responsible for 46 percent of Infineon's sales and at €484 million increased at 14 percent year-on-year. This reflected strong demand for vehicles worldwide, with above-average demand German premium brands such as Audi, Daimler, BMW and Porsche
The industrial power division achieved sales growth of 28 percent to a total of €185 million while the power and multimarket division grew by 11 percent and the smartcard and security division by 12 percent.
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