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UPDATE 1-Infineon halves investment as economy worsens
November 14, 2012 / 7:53 AM / 5 years ago

UPDATE 1-Infineon halves investment as economy worsens

* Sees fiscal 2013 revenue down 5-9 pct

* To cut investments to 400 mln euros, from 890 mln

* Q4 operating profit broadly in line with expectations

* Shares indicated 2.2 percent lower (Adds detail, CEO comment, background)

NEUBIBERG, Germany, Nov 14 (Reuters) - German chipmaker Infineon will more than halve investments in its current fiscal year as it sits out a darkening economic outlook.

The company said it would cut 2013 investment to 400 million euros ($508 million) from an earlier planned figure of 500 million euros, representing less than half of the 890 million euros it invested in its previous fiscal year.

“Macroeconomic headwinds are getting stronger and we do not see this changing in the near term,” Chief Executive Reinhard Ploss said in a statement on Wednesday.

Infineon also said it expects revenues to drop between 5 percent to 9 percent in the year to Sept. 30, 2013, with its operating margin at between 5 percent and 9 percent of revenues.

It also plans to cut costs through measures such as temporarily switching off underutilised equipment, reducing temporary staffing and making selective use of shorter working hours for its staff.

The company reported a 41 percent drop in fourth-quarter operating profit, excluding special items, to 116 million euros, broadly in line with the average estimate in a Reuters poll of analysts.

Infineon shares are indicated to open 1.9 percent lower, underperforming the German blue-chip index, which is seen opening flat. ($1 = 0.7867 euros)

Reporting by Harro ten Wolde; Editing by Victoria Bryan and David Goodman

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