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Investing.com -- Infineon (OTC:IFNNY) Technologies (ETR:IFXGn) on Tuesday raised its full-year profitability outlook after reporting stronger-than-expected segment margins in the fiscal third quarter, though its fourth-quarter revenue guidance came in below consensus.
The German company now expects full-year segment margin to reach the high-teens percentage range, up from a previous forecast of mid- to high-teens.
The semiconductor manfufacturer maintained its full-year revenue projection at around €14.6 billion, below the €14.8 billion consensus.
Adjusted gross margin is expected to be at least 40%, unchanged from earlier guidance.
Segment margin for the three months ended June 2025 rose to 18%, ahead of the 15.6% consensus and Jefferies’ forecast of 15%.
Revenue totaled €3.70 billion, broadly in line with the €3.71 billion consensus and slightly below Jefferies’ estimate of €3.732 billion.
Profitability was driven by a better-than-expected performance in the Power & Sensor Systems (PSS) and Green Industrial Power (GIP) segments.
PSS revenue was €1.05 billion, missing expectations, but its segment margin reached 18.8%, beating the 13.4% consensus.
GIP generated €431 million in revenue and posted a 14.2% margin, also ahead of forecasts.
The Automotive (ATV) segment reported €1.87 billion in revenue, in line with consensus and slightly above internal estimates. Its margin stood at 19.8%, exceeding both the 18.6% consensus and 18% Jefferies forecast.
Connected Secure Systems (CSS) revenue reached €349 million, with a segment margin of 11.2%, outperforming expectations.
For the fiscal fourth quarter, Infineon projected revenue of about €3.9 billion, a 5% sequential increase but below the €4.03 billion consensus and Jefferies’ forecast of €3.98 billion.
The guidance assumes a EUR/USD exchange rate of 1.15, revised from 1.125. Segment margin is expected to remain in the high-teens range.
The company stated that PSS and GIP are expected to grow above the group average in the final quarter, while ATV is forecast to grow at a low single-digit rate. CSS is expected to grow in line with the group average.
“While overall revenue trends are slightly below our and the market’s expectations, we believe this is mainly due to tariff uncertainty in the US and some signs of weakness in the China car market,” said analysts at Jefferies in a note.
“With tariff uncertainty subsiding, we remain positive on the cyclical and structural growth outlook, and further margin recovery,” the brokerage added.