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Infineon posts red in spite of sales growth – Bayer lowers forecast

More sales, but a problem with earnings: This is indicated by the latest quarterly figures for the semiconductor company Infineon. The bottom line is even a minus. Nevertheless, the DAX® company can score. In contrast, the pharmaceutical and agrochemical group Bayer is becoming increasingly cautious when it comes to business in the current year. The coronavirus pandemic is only one stress factor.

The most important thing about Infineon and Bayer in advance:

  • Weakness in the auto industry has a negative impact on Infineon
  • Bayer suffers from Corona and the agricultural division

The chip industry is one of those sectors that have so far come through the coronavirus pandemic quite lightly. The trend towards more digitalization helped. In contrast, the general weakness of the automotive industry had a negative impact on the German semiconductor giant Infineon – especially on the earnings side.

As the DAX® company announced, the operating result in the third quarter of the 2019/2020 financial year was 220 million euros. That was almost a third less than in the same period last year. The bottom line at Infineon was, according to the information, even red numbers in the books: The deficit amounted to 128 million euros after a profit of 224 million euros a year ago. Despite the negative effects of the corona crisis, the chip manufacturer showed an increase in sales for the past three months: According to the same period in the previous year, revenues improved by around eight percent to 2.17 billion euros. Both sales and operating profit were well above the average analyst estimates.

Products on Infineon Technologies

In the era of the corona virus pandemic, Bayer’s confidence in significant growth in 2020 is waning. The German agricultural chemicals and pharmaceuticals group is cautious about the current year. As reasons for the reluctance, the DAX® company cites not only the continuing uncertainty in connection with the Corona crisis, but also increased reserves for litigation and declines in the pharmaceuticals sector. However, sales in the agricultural sector increased.

For the year as a whole, Bayer is now aiming for an increase in revenues of zero to one percent before exchange rate effects and the purchase and sale of parts of the company. The target sales range is reported to be 43 to 44 billion euros. So far, the group had targeted 44 to 45 billion euros. According to the company, earnings before interest, taxes, depreciation and amortization (EBITDA) and before special items are expected to continue to be around 28 percent. Bayer therefore expects an operating profit of around EUR 12.1 billion. So far, the earnings outlook had been between EUR 12.3 billion and EUR 12.6 billion.

Products on Bayer

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Source: HSBC

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