Infineon hikes outlook as sees lasting demand ahead
* Forecast FY sales yoy growth in "high 30s" pct
* Sees FY margin of more than 10 percent.
* Sees Q3 revenue margin up 2-4 pct points vs Q2
* Shares down 1.5 pct (Adds analyst comment, share price)
By Nicola Leske
FRANKFURT, April 28 (Reuters) - German chipmaker Infineon <IFXGn.DE> raised its full-year outlook on the back of healthy growth across its business on continued strong demand, a sign the market is recovering faster than expected. Infineon, which was fighting to survive just a year ago as demand fell off on the back of the global financial crisis, has turned itself around thanks to strict cost savings, a capital increase to help pay down debt, and a rise in tech spending.
"Growth during the second quarter exceeded our original expectations," Chief Executive Peter Bauer said on Wednesday.
Infineon raised its outlook for its fiscal year to the end of September, saying it now aims for year-on-year sales growth in the "high 30s" percentage rate with a full-year margin of more than 10 percent.
Previously, the company had said it expected revenue growth of more than 20 percent with a high single-digit margin.
Infineon forecast third-quarter revenue growing at a high single-digit percentage rate and its margin to increase between 2 and 4 percentage points month on month.
Infineon chips can be found in mobile phone handsets by Nokia <NOK1V.HE>, Samsung <005930.KS> and LG <066570.KS>. It is an open industry secret that it also supplies the chips for Apple's <AAPL.O> iPhone and its iPad, even though Infineon declines to comment on its relationship with Apple.
Infineon, which is also Europe's biggest supplier of chips used in cars, said first-quarter operating profit from its four major divisions -- Automotive, Wireless Solutions, Industrial & Multimarket and Chip Card & Security -- was up 25 percent at 110 million euros ($146.5 million) and sales rose 55 percent to 1 billion euros.
Infineon shares were down 1.5 percent by 0740 GMT, underperforming the German blue chip index DAX <.GDAXI> which was down 0.7 percent.
DZ Bank analyst Harald Schnitzer called the results and outlook encouraging and said he expected the strong performance to continue.
"Impressive set of figures. Given the company's strong market position, particularly in auto and industry electronics, we remain very positive for the stock," Schnitzer said.
"We expect that Wireless will get stronger within the next quarters especially due to the strong relationship with Apple."
Infineon's results chimed with forecast-beating quarterly results from larger U.S. rival Intel <INTC.O>, Dutch chip equipment maker ASML <ASML.AS> <ASML.O> and Franco-Italian group STMicroelectronics <STM.PA>.
Infineon trades on a 12-month forward price/earnings ratio of 16.4 times, a premium to ASML's 13.8 and STMicroelectronics 14.3, according to Thomson Reuters StarMine, which weights estimates by analysts' previous accuracy. ($1=.7508 Euro) (Editing by Knut Engelmann and Karen Foster)
