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Investing.com -- Infineon (OTC:IFNNY) Technologies (ETR:IFXGn) lowered its full-year outlook on Thursday, citing mounting pressure from trade tensions and currency fluctuations.
The German semiconductor maker now expects revenue for the fiscal year ending in September to decline slightly from the €14.96 billion ($16.91 billion) reported in 2024. This marks a shift from its previous forecast, which anticipated flat to slightly higher revenue.
Profitability expectations were also trimmed, with the segment result margin now seen in the mid-teens, down from prior guidance of a mid-to-high-teens range.
“Given that order intake still shows no signs at all of slowing down, we can only guesstimate the effects of tariff disputes,” said Infineon CEO Jochen Hanebeck. “We have therefore applied a haircut of 10% of expected revenue in the fourth quarter of the 2025 fiscal year.” He added that, without this adjustment, guidance would have remained largely unchanged.
In the March quarter, Infineon reported sales of €3.59 billion, a 1% decline from the same period a year ago, and in line with analyst estimates. Net profit dropped 41% to €232 million, while the segment result slipped 15% to €601 million. The segment result margin narrowed to 16.7% from 19.5%.
"We think investors will focus on the currency and tariffing impact on earnings this year, querying also the source of any industrial and automotive robustness," Morgan Stanley (NYSE:MS) analysts said in a post-earnings note.
Separately, Barclays (LON:BARC) analysts said that while visibility remains limited, Infineon’s move "seems like a conservative approach even if it is 4Q (calendar 3Q) where we think uncertainty is highest for our coverage at this stage."
"Taking 2025 guidance, assuming 5-15% revenue growth in 2026, plus some margin expansion, could imply valuation of 14-21x P/E - not necessarily cheap but somewhat reflecting the uncertainty ahead already," analyst Simon Coles noted.