FRANKFURT -- Chip maker Infineon reported a 2 percent drop in quarterly operating profit today, but raised its medium-term operating margin target to 17 percent from 15 percent.
The company expects to benefit from the strong dollar and its acquisition of International Rectifier while growing demand for its chips that enable a more efficient use of electricity should help it outperform the overall market, Infineon said in a statement.
The German company reported a fall to 280 million euros ($298 million) in operating profit, excluding special items, for the quarter ending Sept. 30, slightly below the 285-million-euro average forecast in a Reuters poll in which estimates ranged from 272-293 million euros.
"We are strategically well positioned with our solutions for electro-mobility, autonomous driving, renewable energy generation and the efficient use of electric power," CEO Reinhard Ploss said.
Infineon, whose chips activate car airbags, enable cruise control, manage power supplies and cut vehicle emissions, also said it expected first-quarter revenue to drop 4 percent from the previous quarter with an operating margin of 14 percent.
For its fiscal year ending in September 2017, Infineon said it expected revenue to rise some 6 percent with an operating margin of about 16 percent. A 6 percent rise would mean revenue of 6.86 billion euros, below the most pessimistic forecast in the Reuters poll.