Taiwan Semiconductor Manufacturing Company (TSM.US) will report its Q2 2024 results before the launch of the Wall Street session tomorrow. As world's largest semiconductor manufacturer, TSMC is closely watched by investors and its earnings report may shape sentiment for the whole sector. Especially now, when threat of new trade restrictions looms over the sector.
What markets expects from TSMC earnings?
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Create account Try a demo Download mobile app Download mobile appAccording to Bloomberg survey, TSMC is expected to report Q2 sales at NT$658.1 billion (or around 20.4 billion USD. This is also the upper limit of the $19.6-20.4 billion guidance offered by company itself for the quarter. However, those expectations seem low given that monthly data from the company for April-June period sums to net sales of NT$673.5 billion, or around 20.8 billion USD. This would imply an around-35% year-over-year growth in sales in Q2 2024, fast than 5-year average of 17.5% YoY
Operating income is expected at NT$274 billion for an operating margin of around 41.6%. This is near the upper limit of the 40-42% guidance range. Net income is expected at NT$235 billion, for a net margin of around 35.7%.
Focus on AI and guidance
Apart from results, investors will also focus on the commentary to the release. Especially whether the company still see very strong AI-related demand or is the weakening, or may strengthen? Any news on capacity increases will also be welcome, given a strong backlog of orders from big clients like Apple or Nvidia and overall increased level of demand for its products.
Q3 guidance the company will provide along with earnings releases will also be closely watched and will have impact on the market reaction. Current market expectations for the July-September 2024 quarter point to sales of $22.5 billion, gross margin of 52.5% and operating margin of 42.1%.
TSMC (TSM.US) launched today's trading lower amid a broader sell-off in the semiconductor sector triggered by concerns over new trade restrictions. Company's stock dropped to a 2-week lows and is making a break below the lower limit of a local market geometry. The next support zone to watch can be found in the $167 area, marked with 38.2% retracement of the upward impulse launch in the second half of April 2024.
Source: xStation5
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