Infineon raises 2015 guidance on weak euro, Rectifier boost

By Harro Ten Wolde FRANKFURT (Reuters) - Chipmaker Infineon raised its revenue and profitability forecasts on Tuesday for a second time this year on the back of an expected boost from the weak euro and recently acquired International Rectifier. Infineon, the chips of which activate car airbags, control air conditioners and manage power supplies, said it expects 2015 revenue to rise by between 34-38 percent from last year, having previously forecast a rise of 10-14 percent. "The signals we are receiving from our markets are generally positive," Chief Executive Reinhard Ploss said in a statement. "We are making good progress with the integration of International Rectifier. Our strategy is paying off and Infineon remains on a growth path." Analysts had been expecting another upgrade to Infineon's forecasts, but the sector's prospects were brought into question last week when Franco-Italian chipmaker STMicroelectronics reported weaker than expected results and said it expects little progress in the current quarter. Infineon, which had upgraded its forecasts in January and based based its latest guidance on an assumed exchange rate of $1.10 to the euro, also said that operating profit in its second quarter to the end of March rose 36 percent to 198 million euros (145 million pounds), excluding special items. REVENUE JUMP The results and outlook factor in the $3 billion acquisition of International Rectifier, which complements Infineon's range of high-powered chips with the California company's low-power, energy efficient chips. Revenue jumped more than 40 percent from last year and almost a third from its first quarter. Excluding the dollar-euro effect and International Rectifier, Infineon's revenue rose 9 percent from the previous quarter, the company told analysts in a conference call. The second-quarter boost came mainly from Infineon's power management and security chip units, where International Rectifier has strong positions. Operating profit at Infineon's security chips operation was up almost tenfold from last year at 32 million euros, while operating profit in power management more than doubled to 82 million euros. Shares in the company rose 2.9 percent by 1028 GMT in a STOXX Europe 600 technology index up 1 percent. "We expect strong growth rates to continue, with further margin expansion in coming years," Liberum analyst Janardan Menon said in a client note, sticking to his "buy" recommendation. Infineon also predicted a core operating margin of about 15 percent at the mid-point of its sales forecast, having previously estimated a margin of 14-15 percent. (Editing by David Holmes and David Goodman)