Infineon Q4 Operating Profit Sequentially Rises; Lifts Long-term Financial Targets

German semiconductor company Infineon Technologies AG (IFNNY) reported that its operating profit for the fourth quarter of the fiscal year 2022 rose to 920 million euros, from 690 million euros in the previous quarter. The company significantly increased its long-term financial targets. It also announced a major investment in a new factory in Dresden.

Earnings per share from continuing operations for the fourth quarter increased to 0.56 euros from 0.40 euros one quarter earlier. Adjusted earnings per share improved to 0.63 euros in the fourth quarter of 2022 from 0.49 euros in the third quarter.

Group revenue for the fourth quarter of the 2022 fiscal year grew by 525 million euros or 15 percent to 4.14 billion euros from the previous quarter.

It is now planned to put forward a proposal to the Annual General Meeting in February 2023 to increase the dividend once again by 0.05 euros per share. Should the Annual General Meeting approve the planned proposal, the dividend payment for the past fiscal year would rise to 0.32 euros per share.

The company upgraded its target operating model, which defines financial targets over the cycle. The expected average rate of revenue growth will be more than 10 percent, increased from 9 percent + previously. The Segment Result Margin is expected to reach an average level of 25 percent, compared with 19 percent to date.

Free Cash Flow, adjusted for major investments in frontend buildings, should be within a range of 10 to 15 percent of revenue over the cycle.

Infineon said, to enable the expected acceleration in growth of analog/mixed-signal and power semiconductors, it is planning to continue expanding its 300-millimeter manufacturing capacity and invest 5 billion euros. The intended location is Dresden (Germany), subject to adequate public funding.

The new factory is expected to create up to 1,000 new jobs and according to planning could be ready to start production in autumn of 2026.

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