By tf-lawyer.com This Thursday, October 17th, TSMC will hold its earnings conference to unveil its financial performance from the previous quarter and projections for the upcoming period. Analysts are optimistic, noting that the rapid growth of high-performance computing (HPC) applications is driving a surge in orders for TSMC’s advanced manufacturing processes. The company is projected to challenge record highs for revenue, profit, and earnings per share this quarter, contributing to an anticipated over 26% year-on-year increase in dollar revenue for 2024.
Currently, TSMC is in a quiet period ahead of the conference. Analysts estimate that TSMC’s revenue in New Taiwan Dollars (NTD) will exceed 800 billion for the first time this quarter, with profits approaching the 10 billion USD mark, and earnings per share expected to surpass 12 NTD.
With strong fundamentals, recent buying activity has taken place as investors position themselves ahead of the announcement. On Friday, October 11th, TSMC’s stock closed at 1,045 NTD, rising by 25 NTD, marking the highest price since late July. Foreign investors showed significant buying interest, purchasing over 14,000 shares on that day alone, extending a streak of six consecutive days of net buying, totaling more than 47,000 shares. TSMC’s American Depository Receipts (ADRs) also saw a strong performance, closing up over 2.7% at 190.81 USD.
TSMC’s robust demand for advanced manufacturing processes is reflected in its third-quarter consolidated revenue of 759.69 billion NTD, a new record. Major clients, including NVIDIA, AMD, Qualcomm, and MediaTek, are continuing to place orders, and analysts predict that TSMC’s revenue this quarter could increase by around 10% quarter-over-quarter, potentially reaching 836 billion NTD. When calculated in USD, the quarterly revenue is expected to rise by 6% to 9%, roughly translating to between 24.8 billion to 25.5 billion USD.
Regarding profits, analysts expect TSMC to leverage its advanced manufacturing technologies and an expanding application base. This quarter marks the first time TSMC’s profits in USD are projected to reach the 10 billion USD milestone, challenging previous highs and yielding earnings per share above 12 NTD.
On the margins front, despite rising operating expenses and unfavorable currency effects, analysts predict that TSMC’s gross margin could exceed 55% in the fourth quarter, maintaining a positive outlook, even though it hasn’t yet reached the historical high of over 60%. Operating margin is also expected to increase to above 45%, with a historical peak of 52%.
Analysts have indicated that TSMC’s third-quarter USD revenue projections are likely to be achieved while possibly surpassing the high-end estimates. The original forecast for quarterly revenue in NTD was approximately 754 billion, but the actual figure may exceed estimates by around 5.7 billion NTD, suggesting that the USD revenue could surpass high-end expectations by nearly 200 million USD, pending confirmation in the upcoming earnings conference.
Looking ahead to 2024, during the July earnings call, TSMC estimated an annual increase in USD revenue between 24% and 26%. Analysts believe that with actual order volumes being stronger than expected, TSMC may exceed its previously set high targets for annual USD revenue growth.
