U.S.-listed Taiwan Semiconductor Manufacturing Co. (TSM.US) ADRs are currently gaining 7% after the company reported record third-quarter net profit, driven by strong demand for smartphones and artificial intelligence chips. The world's largest chipmaker reported that quarterly net profit rose 54% year-on-year to 325.26 billion Taiwan dollars, equivalent to $10.10 billion. That topped analysts' consensus estimate of 298.00 billion Taiwan dollars. At the same time, TSMC's revenue was also a record, rising 39% to $759.69 billion Taiwan dollars for the quarter. After such strong results, the company decided to raise its earnings forecasts for the fourth quarter of this year and thus for the full year.
FOURTH QUARTER FORECAST
Start investing today or test a free demo
Create account Try a demo Download mobile app Download mobile app- Sales of $26.1 billion to $26.9 billion, $24.94 billion was expected
- Gross margin of 57% to 59%, expected 54.7%
- Operating margin 46.5% to 48.5%, expected 44.3%
THIRD QUARTER RESULTS
- Net income 325.3 billion Taiwan dollars, +54% y/y, expected 299.3 billion Taiwan dollars
- Gross margin 57.8% vs. 53.2% q/q, 54.8% expected
- Operating profit 360.77 billion Taiwan dollars, +58% y/y, 330.82 billion Taiwan dollars expected
- Operating margin 47.5% vs. 42.5% q/q, expected 44.6%
- Sales 759.69 billion Taiwan dollars, +39% y/y, 751.06 billion Taiwan dollars expected
OTHER IMPORTANT COMMENTS
- Sales in 2024 to grow nearly 30% in USD terms
- Company continues to see “extremely strong” demand related to artificial intelligence
In response to such strong results, the stock traded at new highs before Wall Street opened. Moreover, Nvidia (NVDA.US) shares are also up nearly 3%. Source: xStation
The content of this report has been created by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, (KRS number 0000217580) and supervised by Polish Supervision Authority ( No. DDM-M-4021-57-1/2005). This material is a marketing communication within the meaning of Art. 24 (3) of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (MiFID II). Marketing communication is not an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC and Commission Delegated Regulation (EU) 2016/958 of 9 March 2016 supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the technical arrangements for objective presentation of investment recommendations or other information recommending or suggesting an investment strategy and for disclosure of particular interests or indications of conflicts of interest or any other advice, including in the area of investment advisory, within the meaning of the Trading in Financial Instruments Act of 29 July 2005 (i.e. Journal of Laws 2019, item 875, as amended). The marketing communication is prepared with the highest diligence, objectivity, presents the facts known to the author on the date of preparation and is devoid of any evaluation elements. The marketing communication is prepared without considering the client’s needs, his individual financial situation and does not present any investment strategy in any way. The marketing communication does not constitute an offer of sale, offering, subscription, invitation to purchase, advertisement or promotion of any financial instruments. XTB S.A. is not liable for any client’s actions or omissions, in particular for the acquisition or disposal of financial instruments, undertaken on the basis of the information contained in this marketing communication. In the event that the marketing communication contains any information about any results regarding the financial instruments indicated therein, these do not constitute any guarantee or forecast regarding the future results.