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Taiwan Semi (TSM) to Report Q3 Earnings: What to Expect?

Zacks Equity Research

Taiwan Semiconductor Manufacturing Company TSM is scheduled to report third-quarter 2019 results on Oct 17.

Past-quarter Performance

In the last reported quarter, Taiwan Semi reported earnings of 41 cents per ADR unit, which missed the Zacks Consensus Estimate by a cent and declined 12.8% year over year. However, the figure  surged 7.9% sequentially.

Revenues of $7.75 billion declined 1.4% from the year-ago quarter but improved 9.2% from the prior quarter.

Which Way are Q3 Estimates Treading?

For the third quarter, Taiwan Semi anticipates revenues in the range of $9.1 billion to $9.2 billion. Considering the mid-point of the guided range, $9.15 billion reflects a growth of 7.8% when compared with the year-ago actual figure.

Let’s see how things are shaping up prior to this announcement.

Taiwan Semiconductor Manufacturing Company Ltd. Price and EPS Surprise

 

Taiwan Semiconductor Manufacturing Company Ltd. Price and EPS Surprise
Taiwan Semiconductor Manufacturing Company Ltd. Price and EPS Surprise

Taiwan Semiconductor Manufacturing Company Ltd. price-eps-surprise | Taiwan Semiconductor Manufacturing Company Ltd. Quote

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Factors to Consider

Despite seasonality in high-end mobile products, sluggish global economic conditions and customer inventory management, Taiwan Semi’s strong efforts toward innovation of technology products are likely to get reflected in the third-quarter results.

The company’s robust 10-nanometer (NM), 7 NM, 16 NM, and many other advanced technologies are expected to have performed well in the third-quarter 2019. Consequently, this is likely to have aided in the acceleration of the company’s wafer revenues. Notably, the company’s core business comprises wafer.

Further, rapidly increasing demand for Taiwan Semi’s 7 NM technology is likely to have continued as key catalyst in the third quarter.

Moreover, growing adoption rate of this technology by high-performance computing applications are anticipated to have contributed to wafer revenues. Further, the company is likely to have enjoyed continued momentum across the products like mobile, HPC and IoT applications courtesy of 7 NM.

Additionally, accelerating 5G development is likely to have boosted the demand for 7 NM in the to-be-reported quarter.

Moreover, expectation for higher level of overall capacity utilization for 7 NM is likely to have continued as a catalyst in the quarter to be reported. Moreover, improving utilization rate is likely to have aided gross margin expansion in the quarter under review.

Further, the company remains optimistic about the progress in its advanced technologies as well. Moreover, Taiwan Semi’s business growth in the third quarter is likely to have been driven by new product launches of premium smartphones.

Currently, Taiwan Semiconductor carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Stocks to Report Q3 Earnings

Garmin Ltd. GRMN, which is set report on Oct 30, has the Zacks Consensus Estimate for earnings pegged at 94 cents.

Fortive Corporation FTV has the Zacks Consensus Estimate for earnings pegged at 87 cents. It is set to report on Oct 24.

Vishay Intertechnology, Inc. VSH is slated to report on Oct 29. The Zacks Consensus Estimate for earnings is pegged at 22 cents.

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