Corona shock: Infineon withdraws forecast for 2020 fiscal year

March 26, 2020 // By Christoph Hammerschmidt
Corona shock: Infineon withdraws forecast for 2020 fiscal year
The coronavirus pandemic, which is currently worsening worldwide, is causing massive distortions in global supply chains, end markets and economic development in general. These developments are very dynamic and severely limit predictability. Like several other companies, Infineon Technologies AG is therefore withdrawing its previous guidance for the current fiscal year.

Originally, the company had assumed a year-on-year increase in revenues of around 5%. However, the effects of the pandemic may lead to a deviation from previous expectations and to a noticeable decline in revenues compared to the previous fiscal year, the semiconductor manufacturer announced in a press release. The expected lower revenues will also impact Infineon's profitability in the 2020 fiscal year, as vacancy costs will be higher than previously assumed.

Structural growth drivers intact

Against this backdrop, the company intends to continue the cost-cutting measures already initiated. The priority is to secure profitability and strengthen cash flow. Long-term, structural growth drivers - including electric mobility, the Internet of Things (IoT) or renewable energies - remain intact, and Infineon's management even sees the possibility that they will accelerate once the corona crisis is overcome. However, since it is currently not possible to predict how long and how strongly the pandemic will have an economic impact, the specific consequences for revenues and earnings in the 2020 fiscal year cannot be reliably estimated or quantified more precisely.

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