RPT-UPDATE 2-Infineon Q1, FY outlook support budding optimism

(Repeats to add cross-reference in fifth bullet)

* Q1 net profit 66 million euros vs forecast 49 mln

* Sales up 10 percent to 941 million versus f’cast 920 mln

* Doubles full-year revenue growth to over 20 percent

* Shares up 1.6 percent, off highs but outpacing DAX

* For related column, please click on [ID:nLDE60S0P0]
(Adds analyst comments, background, share price)

By Nicola Leske

FRANKFURT, Jan 29 (BestGrowthStock) – German chipmaker Infineon
(IFXGn.DE: ) doubled its 2010 sales growth forecast on Friday as
it posted strong first-quarter results, pointing to continued
high demand which it said underscored signs of a rebound.

“Although uncertainties in the worldwide economy remain
regarding developments in the second half of this fiscal year,
we are raising our guidance for the full 2010 fiscal year,”
Chief Executive Peter Bauer said.

“We are now looking for revenue growth in excess of 20
percent with a high-single-digit … result margin,” he said.

Infineon Technologies AG, spun off from engineering group
Siemens (SIEGn.DE: ) more than a decade ago, anticipates growth
mainly from the automotive and industrial sectors, its biggest
markets — giving further evidence of a general recovery in
those areas.

Infineon, which has four divisions — Automotive, Wireless
Solutions, Industrial & Multimarket and Chip Card & Security —
joined a chorus of peers reporting strong results and some
forecasting an upswing in the semiconductor industry, often seen
as an industrial and economic bellwether.

French rival STMicroelectronics (STM.PA: ) on Wednesday
forecast the semiconductor market would grow 10 to 12 percent
this year. [ID:nLDE60Q0M7]

Rivals Texas Instruments Inc (TXN.N: ) on Monday and Intel
Corp (INTC.O: ) earlier in January also reported strong results.
[ID:nN25194319] [ID:nN15228962]

Despite budding optimism for this year, some warned that any
upswing could suffer as global stimulus measures run out. In
addition, poor outlooks from Motorola Inc (MOT.N: ) and Qualcomm
Inc (QCOM.O: ) dented technology sector optimism on Thursday.

Infineon shares, which gained more than 4 percent in early
trade, were up 1.6 percent at 3.968 euros by 0945 GMT, outpacing
the German blue-chip index (.GDAXI: ) which rose 0.8 percent.

BETTER THAN NORMAL

For its fiscal second quarter which ends on March 31,
Infineon said it expects revenue to be around the same level or,
due to seasonality, down slightly compared with the first
quarter.

Its second-quarter margin should be a high single-digit
percentage, the chipmaker said.

“The guidance for the second quarter is better than normal
seasonality and better than expectations, driven by the core
automotive and industrial activities,” analyst Guenther
Hollfelder at UniCredit said.

Infineon posted a first-quarter net profit of 66 million
euros on a 10 percent sales gain to 941 million versus the
previous quarter, beating average estimates of 49 million and
920 million respectively in a Reuters poll of 10 analysts.
[ID:nLDE60L102]

Infineon’s results and outlook should please shareholders,
due to meet on Feb. 11 for the group’s annual meeting. Still,
they may have to be patient for a first payout from the company.

“While a dividend is technically possible to prepare for the
annual general meeting early 2011, there are no plans to do so,”
Bauer told Reuters in a December interview. [ID:nLDE5BE0E2]

Shareholders will also decide a rare proxy fight in Germany
over who will take over as supervisory board chairman.

Supported by several other investment funds, British pension
fund Hermes is campaigning for ZF Friedrichshafen [ZFF.UL]
finance chief Willi Berchtold to head the board.

Chairman Max Dietrich Kley wants long-serving board member
Klaus Wucherer to replace him. [ID:nLDE60M09J]

Wucherer, a former Siemens manager, has told Reuters that if
elected as chairman he would stay on for only a year to give
Infineon time to find a suitable external candidate.

Stock Market Report

(Editing by David Holmes)

RPT-UPDATE 2-Infineon Q1, FY outlook support budding optimism