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Infineon (IFNNY) Down 3.3% Since Earnings Report: Can It Rebound?
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It has been about a month since the last earnings report for Infineon Technologies AG (IFNNY - Free Report) . Shares have lost about 3.3% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Recent Earnings
Infineon reported better-than-expected first-quarter fiscal 2017 results. Adjusted earnings of $0.18 per share missed the Zacks Consensus Estimate by a penny and remained flat on a year-over-year basis.
Moreover, revenues increased 5.7% year over year to $1.73 billion in the quarter. The top-line growth came on the back of strong sales in two of the company’s four business segments, namely, Automotive and Industrial Power Control.
Quarter Details
Automotive (ATV) revenues increased 14.8% year over year to $741.4 million. Continued high demand for driver assistance systems and products deployed in hybrid and electric vehicles drove the results.
Industrial Power Control (IPC) revenues increased 6% year over year to $277.6 million.
Power Management & Multi-market (PMM) revenues declined 2.2% on a year-over-year basis to $522.6 million.
Moreover, Chip Card & Security (CCS) revenues declined 0.6% from the year-ago quarter to $183 million.
Adjusted gross margin contracted 10 basis points (bps) from the year-ago quarter to 37.6% in the reported quarter.
Research & Development (R&D) and Selling, General & Administrative (SG&A) expenses as percentage of revenues decreased 60 bps and 90 bps, respectively.
As a result, operating margin expanded 50 bps on a year-over-year basis to 11.2%.
Segment-wise, ATV, Industrial Power Control, Power Management & Multi-market and Chip Card & Security operating margins contracted 90 bps, 90 bps, 60 bps and 330 bps, respectively.
Guidance
For second-quarter 2017, Infineon expects revenues to increase 5% (+/- 2%). At the mid-point of the forecast revenue range, the segment operating margin is expected to be 15%.
For fiscal 2017, Infineon continues to forecast revenue growth around 6% (+/-2%), and a segment operating margin of 16% at the mid-point of revenue guidance.
The ATV segment is expected to grow at a substantially faster rate than the consolidated company average. Growth in the IPC segment is forecast to be roughly in line with or slightly higher than the consolidated company average. The PMM and CCS segments are both expected to report growth rates below the consolidated company average.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last one month period as none of them issued any earnings estimate revisions.
At this time, Infineon's stock has a great Growth Score of 'A', though it is lagging a lot on the momentum front with a 'D'. Following a similar course, the stock was allocated also a grade of 'B' on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'A'. If you aren't focused on one strategy, this score is the one you should be interested in.
Based on our scores, the stock is more suitable for growth investors than those looking for value.
Outlook
The stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.
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Infineon (IFNNY) Down 3.3% Since Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for Infineon Technologies AG (IFNNY - Free Report) . Shares have lost about 3.3% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Recent Earnings
Infineon reported better-than-expected first-quarter fiscal 2017 results. Adjusted earnings of $0.18 per share missed the Zacks Consensus Estimate by a penny and remained flat on a year-over-year basis.
Moreover, revenues increased 5.7% year over year to $1.73 billion in the quarter. The top-line growth came on the back of strong sales in two of the company’s four business segments, namely, Automotive and Industrial Power Control.
Quarter Details
Automotive (ATV) revenues increased 14.8% year over year to $741.4 million. Continued high demand for driver assistance systems and products deployed in hybrid and electric vehicles drove the results.
Industrial Power Control (IPC) revenues increased 6% year over year to $277.6 million.
Power Management & Multi-market (PMM) revenues declined 2.2% on a year-over-year basis to $522.6 million.
Moreover, Chip Card & Security (CCS) revenues declined 0.6% from the year-ago quarter to $183 million.
Adjusted gross margin contracted 10 basis points (bps) from the year-ago quarter to 37.6% in the reported quarter.
Research & Development (R&D) and Selling, General & Administrative (SG&A) expenses as percentage of revenues decreased 60 bps and 90 bps, respectively.
As a result, operating margin expanded 50 bps on a year-over-year basis to 11.2%.
Segment-wise, ATV, Industrial Power Control, Power Management & Multi-market and Chip Card & Security operating margins contracted 90 bps, 90 bps, 60 bps and 330 bps, respectively.
Guidance
For second-quarter 2017, Infineon expects revenues to increase 5% (+/- 2%). At the mid-point of the forecast revenue range, the segment operating margin is expected to be 15%.
For fiscal 2017, Infineon continues to forecast revenue growth around 6% (+/-2%), and a segment operating margin of 16% at the mid-point of revenue guidance.
The ATV segment is expected to grow at a substantially faster rate than the consolidated company average. Growth in the IPC segment is forecast to be roughly in line with or slightly higher than the consolidated company average. The PMM and CCS segments are both expected to report growth rates below the consolidated company average.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last one month period as none of them issued any earnings estimate revisions.
Infineon Technologies AG Price and Consensus
Infineon Technologies AG Price and Consensus | Infineon Technologies AG Quote
VGM Scores
At this time, Infineon's stock has a great Growth Score of 'A', though it is lagging a lot on the momentum front with a 'D'. Following a similar course, the stock was allocated also a grade of 'B' on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'A'. If you aren't focused on one strategy, this score is the one you should be interested in.
Based on our scores, the stock is more suitable for growth investors than those looking for value.
Outlook
The stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.