TSMC Q4 Profit Drops, Revenues Flat, But Stock Up In Pre-market

(RTTNews) - Taiwan Semiconductor Manufacturing Co. Ltd. or TSMC reported Thursday that its fourth-quarter profit declined from last year, while revenue was essentially flat. The earnings and top line were better than market expectations. Sequentially, profit and revenues increased from last year. Looking ahead for the first quarter, the company projects sequentially lower revenues. TSMC shares were gaining around 6 percent in pre-market activity on the NYSE.

Wendell Huang, VP and Chief Financial Officer of TSMC, said, "Our fourth quarter business was supported by the continued strong ramp of our industry-leading 3-nanometer technology. Moving into first quarter 2024, we expect our business to be impacted by smartphone seasonality, partially offset by continued HPC-related demand."

For the first quarter, the company projects revenue between $18.0 billion and $18.8 billion, gross profit margin between 52 percent and 54 percent, and operating profit margin between 40 percent and 42 percent.

Analysts on average expect revenues of $18.26 billion for the first quarter, according to figures compiled by Thomson Reuters. Analysts' estimates typically exclude special items.

The management further expects the 2024 capital budget to be between $28 billion and $32 billion.

For the fourth quarter, net income was NT$238.71 billion, down 19.3 percent from last year's NT$295.90 billion. Earnings per share fell to NT$9.21 or $1.44 per ADR unit, from prior year's NT$11.41.

Consolidated revenue was NT$625.529 billion, compared to NT$625.532 billion a year ago. In US dollars, revenue was $19.62 billion, down 1.5 percent year-over-year.

Analysts expected the company to report earnings of $1.37 per share on revenues of $19.45 billion.

On a sequential basis, fourth-quarter results represented a 14.4 percent increase in revenue and a 13.1 percent increase in net income. In US dollars, fourth-quarter revenue increased 13.6 percent from the previous quarter.

Gross margin for the quarter was 53.0 percent, and operating margin was 41.6 percent.

In the fourth quarter, shipments of 3-nanometer accounted for 15 percent of total wafer revenue, while 5-nanometer accounted for 35 percent and 7-nanometer accounted for 17 percent of total wafer revenue.

Advanced technologies, defined as 7-nanometer and more advanced technologies, accounted for 67 percent of total wafer revenue.

In pre-market activity on the NYSE, TSMC shares were trading at $108.78, up 5.7 percent.

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