* Sees 2013 sales at upper end of 3.56-3.71 bln target range
* Analysts polled by Reuters see 2013 sales at 3.7 bln euros
* CEO says "the trough is behind us"
* Shares rise 9 pct at top of sector index
By Harro Ten Wolde
FRANKFURT, May 2 German chipmaker Infineon
brightened its gloomy outlook for this year, citing
orders from carmakers hoping sales of higher-spec models in
China will offset flagging demand in Europe.
The company, whose chips activate airbags, enable cruise
control and cut emissions among other functions, said it
expected 2013 revenue to drop by five percent on last year
instead of up to 9 percent.
Infineon said it expected its 2013 revenue to come in at the
high end of its previous target range of 3.56-3.71 billion
euros. Analysts polled by Reuters expected Infineon to reach
2013 sales of 3.7 billion euros.
The company also said its 2013 core operating profit margin
would reach the upper end of its 5-9 percent range.
"The trough is behind us," Chief Executive Reinhard Ploss
said in a statement. "Our order books are filling up, albeit
still with a relatively high proportion of short term business."
The upbeat tone of the company chimes with peers in a sector
that has suffered from a post-financial crisis as demand
collapsed from industry and cars to consumer electronics.
Earlier Texas Instruments forecast growth for the
current quarter on improving demand for its chips.
Although the global automotive industry is still battling a
slump in sales, especially in Europe, Infineon said revenue
levels had recovered at its automotive unit, which accounts for
about half of its revenue.
The Neubiberg, southern German-based company said its
automotive business was benefiting from global trends to make
cars safer, cleaner and more energy efficient. Such technology
is often implemented first in premium cars.
"The number of chips used in these premium cars is 3-4 times
higher than in mid-size and small cars," said Arunjai Mittal,
member of Infineon's management board.
"We expect this premium segment to continue to grow this
year, so we should continue to benefit from that trend," he
said, adding demand from China was offsetting weakness in
Infineon declined to give more details of its orders but
said the book-to-bill ratio at all its units was above 1, which
means more orders were received than filled, indicating strong
A Credit Suisse survey last month showed sales by Chinese
luxury car dealerships increased 17-22 percent during the first
quarter and the analysts said they expected luxury brands in
China to maintain strong sales in 2013.
Infineon also said it expects revenue for the current fiscal
third quarter to be around 1 billion euros, with an operating
margin of around 10 percent.
Infineon shares jumped 9 percent in by 1030 GMT at the top
of a 0.1 percent weaker European technology index.
The company's adjusted operating profit in the three months
to March fell 53 percent to 68 million euros, beating the most
optimistic estimate in a Reuters poll with an average
expectation of 51.3 million euros.