The U.S.-listed shares of Taiwan Semiconductor Manufacturing Co. Ltd. (TSM) slumped 2.9% in premarket trading on Thursday. The contract semiconductor maker exceeded second-quarter earnings expectations but experienced contracting margins, which contributed to a somewhat downbeat outlook.
Key financial highlights for the second quarter:
- Net income fell to NT$181.80 billion ($5.85 billion), or $1.14 per American depositary share.
- Revenue decreased by 10.0% to NT$480.84 billion ($15.68 billion).
- FactSet consensus projected earnings per ADS of $1.07 and revenue of NT$479.87 billion.
The gross margin for the second quarter contracted to 54.1%, compared to 56.3% in the first quarter and 59.1% a year ago. The company projects further contraction in gross margin for the third quarter, ranging from 51.5% to 53.5%.
Chief Financial Officer Wendell Huang commented on the business performance, stating, “Our second quarter business was impacted by the overall global economic conditions, which dampened the end market demand and led to customers’ ongoing inventory adjustment.”
Despite recent challenges, Taiwan Semiconductor Manufacturing Co. Ltd. has demonstrated resilience in the market. Over the past three months, the company’s stock price has rallied by 15.4%, outperforming both the PHLX Semiconductor Index (+24.8%) and the S&P 500 (+10.6%).
Stay tuned for further updates as Taiwan Semiconductor Manufacturing Co. Ltd. continues to navigate through evolving market conditions and maintain its position as a leader in the semiconductor industry.
