Three days after sacking its CEO,
warned Wall Street that sales in its communications group will fall short of expectations.
The German chipmaker said Thursday that its results were hurt by lower volumes in certain "wireless platform projects." As a result, Infineon said revenue in the group will be sequentially flat in its fiscal third quarter, instead of the mid-to-high-single digit percentage increase it predicted in April.
The company said that earnings before interest and tax, or EBIT, will decline in the quarter, because of the revenue shortfall as well as costs associated with launching new products. EBIT is expected to improve in the fiscal fourth quarter, Infineon said.
Shares of Infineon slid 11.7%, or $1.17, to $8.79 in midday trading Thursday.
The earnings warning comes on the heels of Infineon's announcement Monday that CEO Wolfgang Ziebart would resign because of "different opinions on the future strategic orientation of the company." The differences are believed to have been with Chairman Max Dietrich Kley, who has been rumored to be looking to merge the Infineon with another chipmaker, such as
Infineon makes a broad range of chips for automobiles, industrial equipment and communications gear. The company has lost billions of dollars in recent quarters, primarily because of its majority stake in DRAM memory maker
Thursday's news suggests that Infineon is experiencing difficulties in other parts of the company as well, particularly in its business making chips for cell phones, in which it competes with heavyweights like