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What's in Store for Taiwan Semiconductor (TSM) Q4 Earnings?

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Taiwan Semiconductor Manufacturing Company TSM is scheduled to report fourth-quarter 2019 results on Jan 16.

For fourth-quarter 2019, Taiwan Semi anticipates revenues between $10.2 billion and $10.3 billion.

The Zacks Consensus Estimate for fourth-quarter earnings is pegged at 72 cents per share.

In the third quarter, Taiwan Semi reported earnings of 62 cents per ADR unit, which surged 10.7% year over year and 51.2% sequentially.

Revenues of $9.4 billion improved 10.7% from the year-ago quarter and 21.3% from the prior quarter.

Factors to Consider

Taiwan Semi’s strong efforts toward innovation of technology products are likely to get reflected in the fourth-quarter results.

Demand for the company’s 7-nanometer (NM) technology is likely to have accelerated during the to-be-reported quarter, courtesy of ongoing progress in the 5G deployment globally. Hence, solid prospects related to 5G are expected to have driven the company’s fourth-quarter top line,.

Moreover, expectation for higher level of overall capacity utilization for 7 NM is likely to have continued as a catalyst in the quarter to be reported.

Further, Taiwan Semi’s advanced technologies, which are defined as 16 NM and below, are likely to have sustained momentum in the fourth quarter.

Consequently, all these are likely to have contributed to the company’s fourth-quarter wafer revenues. Notably, the company’s core business comprises wafer.

Further, the company’s new product introductions in the premium smartphones and high-performance computing applications are anticipated to have driven end-market performance in the to-be-reported quarter.

However, ongoing headwinds in the semiconductor market are likely to get reflected in the fourth-quarter results.

What Our Model Says

Our proven model doesn’t 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’s not the case here.

Taiwan Semiconductor has a Zacks Rank #1 and 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.

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Here are a few stocks that you may consider, as our proven model shows that these have the right combination of elements to post an earnings beat this quarter.

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