* Imposes hiring freeze, slashes investment
* 2012 revenue expected to drop 3 pct
* Q3 revenue flat vs slightly lower predicted
* Q3 oper. margin 12.7 pct vs guidance of around 12 pct
* Shares jump 7.8 pct, outperforming main index
By Harro Ten Wolde
FRANKFURT, July 31 German chipmaker Infineon
on Tuesday painted a gloomy picture of the near
future after an unexpected beat on third-quarter revenue and
operating margin hoisted its shares over 7 percent.
The group, which supplies the car and engineering
industries, imposed an immediate hiring freeze and slashed
investment for 2013 in anticipation of sharply lower sales in
the near term, echoing the wariness of peers STMicroelctronics
"Growth and margin are currently below plan, reflecting
global uncertainties," said Infineon's Chief Executive Peter
Bauer, who will leave in September for health reasons.
He added he expected 2012 revenue to drop about 3 percent,
while operating margin would be at 13-14 percent.
"Current and near-term foreseeable sales revenue levels are
significantly lower than originally forecast," he said.
The company confounded its own low-key third-quarter
outlook, which it lowered only last month, by posting flat
revenue where it had predicted a slight decline and an operating
margin of 12.7 percent, ahead of the predicted 12 percent.
Shares in Infineon, whose customers include Korean carmaker
Hyundai, software maker Microsoft and the
U.S. Government Printing Office, were up 7.8 percent at 5.98
euros by 1003 GMT at the top of a 0.3 percent stronger sector
Infineon shares dropped to nine-month lows after a June 26
profit warning and are now up 1 percent so far this year,
underperforming the sector, which has risen almost 10 percent.
"Infineon effectively guided down the Street in a warning
and then handsomely outperformed," said Jefferies analyst Lee
He said guidance was probably conservative and said the
company was right to cut investment.
Third-quarter operating profit before exceptionals, or
"total segment result", for the March-to-June period fell 13
percent to 126 million euros ($154.25 million).
Infineon said it expected sales in the fiscal fourth quarter
to the end of September to be flat or down slightly from the
third quarter while operating margin would fall back to 12
It previously said fourth-quarter revenue and margin would
Analysts expect revenue for the fiscal year, which ends on
Sept. 30, of 3.87 billion euros according to StarMine, or a 3.2
percent drop from last year's 4.00 billion.
The stock trades at a 12-month forward price-to-earnings
ratio of 13.3, compared to 24.4 for STMicroelectronics
and 10.5 for Intel, according to StarMine data.