Infineon Technologies AG, which is the No. 2 maker of computer chips in Europe, was downgraded by Bank of America (NYSE:BAC) from “Neutral” to “Underperform” today.
The primary business of Infineon is supplying the chips for Apple Inc.’s (NASDAQ:AAPL) iPhone and mobile phones for LG Electronics Inc.
Even though Infineon has said they’re going to increase guidance for the overall year, analysts say that has already been factored into the price of stock, which had no effect on the decision to downgrade the stock by Bank of America.
For the quarter ending March 31, estimates are Infineon revenue increased by somewhere around 10 percent, reaching about $1.28 billion for the period, said the company in an e-mail.
The overall global chip sector has been projected to grow in 2010, up to $276 billion, which would be a 20 percent increase over last year if the results meet expectations.
Infineon was fighting this downgrade, as the predictable fall in price of the company stock has already happened today in response to the cut by Bank of America.
Specific guidance from Infineon will com e at its next report scheduled for April 28, which at that time the company asserts they will increase its former guidance.
This contrasts with former projections of the company in January, where it stated the revenue for the second quarter would probably be lower than or equal to revenue in the first quarter. Margins should be around 10 percent, close to what was asserted earlier in the year.
For the fiscal year ending on September 30, Infineon says they should enjoy a growth in revenue of 20 percent.
