* Fiscal Q3 sales 1.04 mln euros vs market view 1.01 bln
* Net profit 190 mln euros vs analysts'156-189 mln forecasts
* Q4 sales seen same or better than Q3, op profit flat
* Shares turn lower after initial gains
(Updates with shares turning lower)
By Tarmo Virki, European Technology Correspondent
HELSINKI, July 28 German chipmaker Infineon
Technologies AG (IFXGn.DE) reported higher-than-expected
quarterly profit and sales on strong demand from automotive and
industrial customers .
Infineon forecast sales in the current quarter to
be the same or better than the last quarter while operating
profit would be flat. This contrasted with its peers which have
recently forecast weaker sales due to sluggish consumer demand.
Infineon, which makes chips for products ranging from cars
to electronic passports, said its fiscal third-quarter sales
rose 5 percent to 1.04 billion euros ($1.5 billion), while net
profit jumped 51 percent from a year ago to 190 million.
"These are good results," said a trader in Frankfurt.
Analysts on average expected revenue of 1.01 billion euros
in the quarter, while their net profit estimates ranged from 156
million to 189 million, according to a Reuters poll.
Shares in the company opened higher, but later
dropped after failing to break through a resistance level.
Shares were 2.8 percent lower at 7 euros by 1240 GMT, while the
blue-chip DAX index was down 1.5 percent, with only a
handful of gainers.
"At its daily high the stock touched the 200-day moving
average but it did not surpass the resistance level," a
Frankfurt-based trader said.
Infineon said sales and profits at its automotive unit were
not significantly hit by disruptions within the automotive
supply chain after the Japan earthquake.
Infineon is Europe's biggest supplier of automotive chips,
which are found in two out of three cars worldwide, used for
anything from fuel injection to power management for electric
cars. The autos segment generates 40 percent of its sales.
German carmakers Volkswagen (VOWG_p.DE) and
Daimler (DAIGn.DE) have reported a sharp rise in sales mainly
thanks to a surge in demand in emerging markets.
Infineon said the quarterly forecast implied a slight hike
in its outlook for the full-year through September, with sales
now seen up more than 20 percent and the profit margin roughly
at 20 percent. It had earlier forecast 20 percent sales growth
with a 19.8 percent margin.
MORE STABLE PERFORMER
Despite strong earnings from Intel and Freescale
, concerns over the financial crisis in Europe, higher
inventories and sluggish PC sales have weighed on chip stocks.
Earlier this week Infineon's larger European rival
STMicroelectronics warned its revenue could slip in the
three months to end-September.
Infineon was spun off from engineering group
Siemens (SIEGn.DE) more than a decade ago and last year chose to
exit the mobile chip business by selling its wireless chip unit
to Intel .
It has since decided to focus on three areas -- automotive,
industrial & multimarket and chip card security -- to reduce its
exposure to volatile consumer trends.
"We believe that today's report will be a further step in
convincing the market that Infineon has become a less volatile
and more reliable player in the semiconductor market," said
Silvia Quandt analyst Eerik Budarz.
Infineon also said it decided to invest some 250 million
euros by 2014 in Dresden, Germany to set up a plant for mass
manufacturing of power semiconductors on 300 millimeter wafers.
(Additional reporting by Nicola Leske, Josie Cox and Harro ten
Wolde in Franfurt; Editing by Jane Merriman and Erica