What's in Store for Taiwan Semiconductors' (TSM) Q2 Earnings?

Taiwan Semiconductor Manufacturing Company TSM is scheduled to report second-quarter 2022 results on Jul 14.

For second-quarter 2022, Taiwan Semiconductor anticipates revenues between $17.6 billion and $18.2 billion.

The Zacks Consensus Estimate for fourth-quarter revenues is pegged at $18.7 billion, suggesting growth of 40.6% from the year-ago quarter’s reported figure.

The consensus mark for second-quarter earnings is pegged at $1.47 per share, indicating an improvement of 58.1% from the prior-year reported figure. Notably, the figure has moved downward by 0.7% over the past seven days.

The company surpassed the Zacks Consensus Estimate in all the trailing four quarters, delivering an earnings surprise of 4.23%, on average.

Taiwan Semiconductor Manufacturing Company Ltd. Price and EPS Surprise

 

Taiwan Semiconductor Manufacturing Company Ltd. Price and EPS Surprise

Taiwan Semiconductor Manufacturing Company Ltd. price-eps-surprise | Taiwan Semiconductor Manufacturing Company Ltd. Quote

Factors to Note

Taiwan Semiconductor is expected to have benefited from the solid momentum in 5G in the second quarter. Strengthening semiconductor demand due to the growing deployment of 5G is expected to have continued benefiting the company.

Acceleration in chip design activity is likely to have aided its performance in the quarter under review.

The company’s strong efforts toward the innovation of technology products are expected to have contributed well to its second-quarter performance. Moreover, it is anticipated to have driven revenue growth in high-performance computing (HPC) applications.

The company’s N4X process technology is expected to have continued aiding in addressing the demanding workloads of HPC products. This, in turn, is likely to have driven the second-quarter performance of the HPC business.

Increasing demand for the company’s 7nm technology is expected to have driven its performance in the quarter under review.

The growing momentum across the 5nm process technology is likely to have been another tailwind.

All these factors are likely to have driven wafer revenue growth of Taiwan Semiconductor in the soon-to-be-reported quarter.

The company is likely to have gained from the growing proliferation of gaming, wearables, drones and VR/AR devices. The growing adoption of cloud services, fueled by the coronavirus-induced work and learn-from-home necessity that has boosted the demand for data-center chips, is expected to have been another positive.

The second-quarter results are also anticipated to reflect the benefits of the growing foundry industry and the increasing proliferation of IoT products.

However, headwinds related to the pandemic are anticipated to get reflected in the to-be-reported quarter’s results. The global shortage of semiconductor capacity due to supply-chain disruptions is expected to have affected the company’s performance in the second quarter.

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. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Taiwan Semiconductor has a Zacks Rank #3 and an Earnings ESP of -0.22%.

Stocks to Consider

Here are some companies, which, per our model, have the right combination of elements to beat on earnings this season.

KLA Corporation KLAC has an Earnings ESP of +0.24% and a Zacks Rank of 3 at present.

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

KLA is scheduled to release fourth-quarter fiscal 2022 results on Jul 28. The Zacks Consensus Estimate for KLAC’s earnings is pegged at $5.46 per share, suggesting an increase of 23.2% from the prior year’s reported figure.

Advanced Micro Devices AMD has an Earnings ESP of +1.32% and a Zacks Rank #3 at present.

Advanced Micro Devices is set to report second-quarter 2022 results on Jul 26. The Zacks Consensus Estimate for AMD’s earnings is pegged at $1.03 per share, which suggests an increase of 63.5% from the prior year’s reported figure.

STMicroelectronics STM has an Earnings ESP of +0.82% and a Zacks Rank #3 at present.

STMicroelectronics is expected to release second-quarter 2022 results on Jul 28. The Zacks Consensus Estimate for STM’s earnings is pegged at 81 cents per share, which suggests an increase of 84.1% from the prior year’s reported figure.

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


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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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