Infineon confirms the reduced guidance, which says a Rescue deal on track

FRANKFURT (Reuters) – German chipmaker Infineon expects to meet its reduced guidance for the year ending Sept. 30, it said on Thursday after posting third-quarter revenue and earnings in line with expectations.

FILE PHOTO: A close-up view of one of the Infineon micro-controller kit the XMC 4700 is displayed in an exhibition at the semiconductor manufacturer Infineon’s annual shareholder meeting in Munich, Germany on February 21, 2019. (REUTERS photo/Andreas Gebert/Picture File

Munich-based Infineon, which in June agreed to buy Silicon Valley-based Cypress Semiconductor, for $10 billion, the deal was on track to close by the end of the year or at the beginning of the year 2020.

“In spite of the continuing difficult economic conditions, we still expect to achieve our targets for the current fiscal year,” said CEO Reinhard Ploss.

“The underlying drivers in our markets are very much intact and will continue to be a good long-term prospects for growth for Infineon.”

The markets initially reacted negatively to the more expensive Ski deal, which is At and has part-funded by a $1.7 billion rights issue. Since the share capital, the shares rallied by more than 20%.

The funding of the debt, and the remainder of the cost of the deal is in place, and it is a loan. In the end, Infineon plans to more than 30% of the cost through their own funds.

Ploss has been on the lookout in order to take advantage of the economic weakness of the state, demand centered on China and the auto industry – in order to bulk-up At the world’s No. 8 chipmaker by sales.

Infineon’s strength in areas such as the management of the systems would be complemented by Cypress’s prowess in on-board systems, enabling the merged company to offer a complete package for the use in electric vehicles.

“Infineon and the Winds of the portfolios complement each other ideally,” said Ploss.

“The acquisition will strengthen our core power semiconductor business and in the long run. By Cypress, Infineon will be able to get a stronger foothold in key markets, and accelerating the pace of economic growth.”

The sales of 2.015 billion, 2% higher than the previous quarter, Infineon said, ” the meeting of market expectations, on the basis of the Refinitiv Eikon data. The operating profit of 283 million euros in the previous period, but it is also in line.

Infineon said that it was on its way to its full-year target for revenue growth of 5% or more, which is a segment of general management, as the preferred measure of the cost effectiveness of 16%.

In the fiscal fourth quarter, revenue is expected to grow by 1%, with segment margin of 14.5%.

Reporting by Douglas Busvine; Editing by Michelle Martin and David Holmes

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