April 21, 2010 / 9:51 AM / 8 years ago

Infineon, ARM jump on Apple result, takeover talk

LONDON/FRANKFURT (Reuters) - Shares in European chip firms ARM and Infineon jumped on Wednesday on rumors of possible interest from larger suitors and strong results from Apple overnight.

Apple reported first-quarter results on Tuesday that beat expectations on strong iPhone sales, and it gave a better-than-expected revenue forecast.

Shares in Infineon were up 3.9 percent by 5:07 a.m. EDT, ARM

stock was up 3 percent and STMicro was up 1.4 percent. Infineon and STM supply chips to Apple’s products, which also use ARM designs.

Shares in Infineon and ARM were also lifted by takeover talk, with traders mentioning Intel as a potential acquirer of Infineon.

Infineon and Intel declined to comment and industry experts were divided on the likelihood of such moves.

“I think it’s very unlikely that Intel are going to go and buy Infineon,” said Richard Windsor, global technology specialist at Nomura.

He cited the fact that Intel had made expensive wireless acquisitions in the past but ended up selling many of the assets after failing to integrate them into its business.

However, Theo Kitz, technology analyst at private German bank Merck Finck, disagreed.

“It would make sense to buy Infineon. A simple majority is all that’s needed,” he said. “Infineon has done well, saved itself from financial ruin last year, and is well positioned in so-called megatrends such as energy efficiency and renewables.”

The Financial Times reported renewed speculation that ARM could be a takeover target, mentioning Apple as a possible suitor.

”ARM is up on a combination of bid speculation in the press today and Apple’s strong results last night, said one London-based analyst.

Apple, which typically offers conservative forecasts, projected revenue of $13 billion to $13.4 billion in the June quarter. Wall Street had forecast revenue of $12.97 billion.

The company sold 8.75 million iPhones in the March quarter -- more than double the figure of a year ago and way above estimates -- driven by strong, broad-based, international demand for the smartphone, some of it due to the addition of new carriers in key overseas markets.

Analysts saw little impact for Nokia, whose shares were 0.7 percent higher at 11.39 euros in Helsinki, because Nokia’s cheaper phones rarely compete with high-end iPhone.

“Nokia portfolio in that segment is pretty weak so I don’t see a huge impact on Nokia beyond what we’ve seen in previous quarters. Nokia’s smartphone volume is being driven at far lower price points,” said CCS Insight analyst Geoff Blaber.

Reporting by Paul Sandle and Georgina Prodhan in London, Nicola Leske, Kirsti Knolle in Frankfurt, Tarmo Virki in Helsinki, Dominic Lau and Atul Prakash in London; Editing by Jon Loades-Carter

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