Bloomberg News

Infineon to Raise Dividend by 20%, Increase Capital Returns

November 23, 2011

(Updates with share price starting in first paragraph, analyst comment in fourth.)

Nov. 23 (Bloomberg) -- Infineon Technologies AG, Europe’s second-largest semiconductor manufacturer, plans to raise its dividend next year and boost a shareholder returns program. The shares gained for the first time in eight days.

The company will increase the dividend by 20 percent to 12 euro cents ($0.16) a share for the year ended Sept. 30 2011, Neubiberg, Germany-based Infineon said in a statement today. It’s also committing an additional 208 million euros between October 2011 and March 2013 in a capital returns program.

“Earnings at continuing operations were better than they were a year ago, so it’s just fair to let investors have a share of that,” said Thomas Becker, an analyst at Commerzbank AG in Frankfurt with a “hold” recommendation on the stock. “Anything else would have been a disappointment. We’re still talking about small numbers.”

Income from continuing operations jumped 28 percent in the three months ended Sept. 30 from a year earlier as customers increased orders. The company resumed dividend payments at 10 cents this year following 10 years of withholding payouts.

Infineon gained as much as 3.8 percent to 5.73 euros and traded 3.4 percent higher as of 11 a.m. in Frankfurt today.

The company is forecasting a slowdown in sales in coming quarters, with revenue falling by a “mid-single-digit percentage” for the fiscal year ended Sept. 30 next year, as the European debt crisis hampers economic growth.

--With assistance from Angela Cullen in Frankfurt. Editors: Robert Valpuesta, Kenneth Wong.

To contact the reporter on this story: Cornelius Rahn in Frankfurt at crahn2@bloomberg.net

To contact the editor responsible for this story: Kenneth Wong at kwong11@bloomberg.net


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