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What Awaits Taiwan Semiconductors (TSM) in Q4 Earnings?

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Taiwan Semiconductor Manufacturing Company Ltd. (TSM - Free Report) is scheduled to report fourth-quarter 2023 results on Jan 18.

For the fourth quarter, TSM anticipates revenues between $18.8 billion and $19.6 billion. The Zacks Consensus Estimate for the same is pegged at $18.99 billion, suggesting a decline of 4.7% from the year-ago quarter’s reported figure.

The consensus mark for fourth-quarter earnings is pegged at $1.34 per share, indicating a decline of 26.4% from the prior-year reported figure. The consensus estimate has been unchanged over the past seven days.

Taiwan Semiconductor’s earnings surpassed the Zacks Consensus Estimate in all the trailing four quarters, with an average earnings surprise of 6.78%.

Factors to Consider

TSM is expected to have benefited from the uptick in chip design activity.

It is likely to have gained strength from growth in high-performance computing-related applications.

Taiwan Semiconductor’s strong efforts toward innovating technology products are likely to get reflected in its fourth-quarter results.

The strong momentum across advanced technologies, defined as 7-nanometer (nm) and below, is likely to have benefited Taiwan Semiconductor in the quarter under review.

The solid adoption of 6 nm and 5 nm technologies is likely to have contributed well to the company's wafer revenues in the fourth quarter.

However, the impacts of softness in the consumer and data center-related end markets are likely to get reflected in the to-be-reported quarterly results.

Mounting expenses associated with setting up and operating semiconductor fabrication facilities overseas are anticipated to have hurt the company’s margins.

Also, rising macroeconomic uncertainties and rising inflationary pressure are expected to have acted as headwinds in the quarter under review.

What Our Model Says

Our proven model does not conclusively predict an earnings beat for Taiwan Semiconductor this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that is not the case here, as elaborated below.

Taiwan Semiconductor has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

TSM carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks to Consider

Here are some stocks that, per our model, have the right combination of elements to post an earnings beat in the soon-to-be-reported quarterly results.

Apple (AAPL - Free Report) has an Earnings ESP of +3.65% and sports a Zacks Rank #1 at present.

Apple is scheduled to release first-quarter fiscal 2024 results on Feb 1. The Zacks Consensus Estimate for AAPL’s earnings is pegged at $2.08 per share, suggesting a jump of 10.6% from the prior-year quarter.

Alphabet (GOOGL - Free Report) has an Earnings ESP of +15.16% and a Zacks Rank #3 at present.

Alphabet is scheduled to release fourth-quarter 2023 results on Jan 30. The Zacks Consensus Estimate for GOOGL’s earnings is pinned at $1.62 per share, indicating growth of 54.3% from the year-ago quarter.

ASML Holding (ASML - Free Report) has an Earnings ESP of +3.32% and a Zacks Rank #2 at present.

ASML Holding is set to report fourth-quarter 2023 results on Jan 24. The Zacks Consensus Estimate for ASML’s earnings is pegged at $5.12 per share, suggesting growth of 8.9% from the prior-year period’s reported figure.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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