January 31, 2018 / 6:51 AM / a year ago

Infineon slashes revenue guidance on weak U.S. dollar

FRANKFURT, Jan 31 (Reuters) - German chipmaker Infineon , the top supplier of power controls to auto and industrial markets, cut its revenue guidance for the 2017/18 financial year due to U.S. dollar weakness as it reported in-line quarterly sales.

Munich-based Infineon now expects revenues to grow by 5 percent, plus or minus 2 percentage points, in the year to Sept. 30, assuming a euro exchange rate of $1.25. That’s down from a prior forecast of 9 percent growth at the top line.

It gave a mid-point outlook of 4 percent sequential revenue growth in the second quarter and said it expected a segment result margin, a measure of core operational profitability, of 16 percent.

Infineon’s first-quarter revenues came in at 1.78 billion euros, compared with a consensus forecast of 1.79 billion euros, according to 15 analysts.

Operating income rose 25 percent from a year earlier to 206 million euros ($256 million), below average expectations of 231 million euros in a Reuters poll of analysts.

“Infineon has made a strong start to the new fiscal year,” CEO Reinhard Ploss said in a statement. “Earnings and margin were better than forecast – despite the expected slight seasonal dip in revenues.” ($1 = 0.8035 euros) (Reporting by Douglas Busvine; Editing by Maria Sheahan)

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