A logo of Taiwan Semiconductor Manufacturing Company (TSMC) is seen during the TSMC global RnD Center opening ceremony in Hsinchu on July 28, 2023. (Photo by Amber Wang / AFP)
Here are TSMC’s first-quarter results versus LSEG consensus estimates:
Net revenue: 592.64 billion New Taiwan dollars ($18.87 billion), vs. NT$582.94 billion expected
Net income: NT$225.49 billion, vs. NT$213.59 billion expected
TSMC reported net revenue rose 16.5% from a year ago to NT$592.64 billion, while net income increased 8.9% from a year ago to NT$225.49 billion. The firm guided first-quarter revenue to be between $18 billion and $18.8 billion.
TSMC is the world’s largest producer of advanced processors and counts companies such as Nvidia and Apple as its clients.
“TSMC is well-positioned for strong performance based on key industry trends. The continued demand for advanced chips, particularly those used in AI applications, is a positive sign for both the short and long term. The focus on advanced chip development, like the shift towards 3nm technology, is another factor driving long-term growth for TSMC,” Brady Wang, associate director at Counterpoint Research, said on Monday ahead of the results.
TSMC currently produces 3-nanometer chips and plans to commence mass production of 2-nanometer chips in 2025. Typically, a smaller nanometer size yields more powerful and efficient chips.
Strong demand for AI chips led by the proliferation of large language models such as ChatGPT and Chinese clones has caused TSMC’s shares to surge 56% in the past one year.
“TSMC’s net profit margin continues to be one of the highest in the company’s history at 40%, against an industry average of 14%, demonstrating TSMC’s strong competitive position. The high margin is the result of an increased share of sales of 7nm and smaller chips, which have significantly higher margins,” Grzegorz Drozdz, market analyst at Conotoxia, said last week.
The U.S. also recently granted TSMC’s Arizona subsidiary preliminary approval for government funding worth up to $6.6 billion to build the world’s most advanced semiconductors. TSMC is also eligible for about $5 billion in proposed loans.
Earlier this month, Taiwan was hit by an earthquake – its strongest one in 25 years. A TSMC spokesperson said its construction sites were normalupon initial inspection, though workers from some fabs were briefly evacuated. Those workers subsequently returned to their workplaces.
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Check out the companies making headlines before the bell. Cisco Systems — The networking technology stock added nearly 2% on the heels of a Citi upgrade to buy from neutral. Citi said artificial intelligence can become a bigger part of the business over time. Novocure — Shares soared roughly 22% after the U.S. Food and Drug Administration approved Novocure’s Optune Lua wearable treatment for metastatic non-small cell lung cancer. Morgan Stanley — Shares gained more than 3% after the bank reported quarterly results before the bell that beat Wall Street’s forecasts, helped by higher-than-expected revenue from its wealth management, trading and investment banking operations. The firm’s earnings came in at $1.88 per share, versus the $1.58 expected by a LSEG analyst poll. Revenue was $15.38 billion versus the $14.41 billion consensus estimate. United Airlines — Shares rose about 1% after the airline beat earnings and revenue expectations for the third quarter. United also announced a $1.5 billion share buyback, its first since before the pandemic. ASML — Shares of the Dutch chip equipment firm slid 4% before the bell, adding to Tuesday’s losses after it accidently released its third-quarter results a day early . The report was disappointing as ASML cut its 2025 sales forecast, suggesting weakness in markets other than those that serve AI applications. J.B Hunt Transport Services — Shares jumped more than 7% after the company’s third-quarter results topped expectations. J.B. Hunt posted $1.49 earnings per share on $3.07 billion of revenue. Analysts polled by LSEG had forecast earnings of $1.41 per share on $3.02 billion of revenue. The company said demand for its intermodal service rose throughout the quarter. — CNBC’s Sean Conlon, Alex Harring, Sarah Min, Michelle Fox and Hakyung Kim contributed reporting.
Ted Pick, CEO Morgan Stanley, speaking on CNBC’s Squawk Box at the World Economic Forum Annual Meeting in Davos, Switzerland on Jan. 18th, 2024.
Adam Galici | CNBC
Morgan Stanley topped analysts’ estimates for third quarter profit as its wealth management, trading and investment banking operations generated more revenue than expected.
Here’s what the company reported:
Earnings:$1.88 a share vs $1.58 LSEG estimate
Revenue: $15.38 billion vs. $14.41 billion estimate
Morgan Stanley had several tailwinds in its favor. The bank’s massive wealth management business was helped by high stock market values in the quarter, which inflates the management fees the bank collects.
Investment banking has rebounded after a dismal 2023, a trend that may continue as easing rates will encourage more financing and merger activity.
Finally, its Wall Street rivals have posted better-than-expected trading results, making it unlikely that the firm missed out on elevated activity.