Infineon Technologies AG  (IFNNY) surged higher Tuesday after Europe's biggest chipmaker posted stronger-than-expected fourth quarter earnings even as it cautioned that global semiconductor markets may not return to growth until the second half of next year.

Infineon said revenues for the three months endings in September, the company's fiscal fourth quarter, rose 1% from last year to €2.062 billion ($2.273 billion) thanks in part to a tailwind from a weaker euro and stronger demand in its power management division. Net income rose 14.2% from the previous year to €161 million, the company said, even as adjusted margins slipped to 36.3%.

Looking into the 2020 fiscal year, Infineon said it doesn't see a broader market recovery until the second half, but still expects revenue growth of around 5% and stable operating margins. Free cash flow is expected to rise to between €500 and €700 million, allowing space for around €1.3 billion in investment.s

"We have achieved our targets for the fourth quarter, bringing a challenging fiscal year to an end on a good note. Demand was particularly strong for our power semiconductors for renewable energy applications and our sensors for consumer devices," said CEO Reinhard Ploss.

"We are feeling the effects of weak global auto demand and do not expect any improvement for the time being," he added. "The general economic environment remains fraught with macroeconomic and political uncertainty. We do not expect markets to recover before the second half of the fiscal year."

Infineon shares were marked 5.7% higher at the start of trading Tuesday to change hands at €19.61each, a move that extends the stock's three-month gain to around 22% and values the Neubiberg, Germany-based group at more than €26 billion.