Taiwan Semiconductor Manufacturing (TSM) on Friday reported strong sales for September, which drove third-quarter revenue modestly above views. But TSM stock dropped on Friday.
The world’s leading semiconductor foundry got a boost during the period, thanks to production of chips for Apple‘s (AAPL) iPhone 13 handsets.
Taiwan Semi said its sales in September rose 19.7% year over year to 152.69 billion New Taiwan dollars, or about $5.51 billion. Sales were up 11.1% in local currency from August.
Third-quarter revenue totaled 414.67 billion New Taiwan dollars, or about $14.89 billion. Analysts had been predicting Taiwan Semi sales of 413.5 billion New Taiwan dollars, according to Wedbush Securities. FactSet estimates put the sales target at $14.83 billion for the third quarter.
Earnings Due Next Week
Taiwan Semiconductor Manufacturing Co., known as TSMC, plans to report its third-quarter results next Thursday. Analysts see the chipmaker earning $1.04 per U.S. share, up 13% year over year.
“Our view remains unchanged as: 1) foundry capacity remains tight, and 2) TSMC is likely realizing the benefits from shipments of silicon for Apple’s next generation of iPhones,” Wedbush analyst Matt Bryson said in a note to clients. He rates TSM stock as outperform.
In morning trading on the stock market today, TSM stock fell 1%, near 109.75.
“Looking forward to December, we remain comfortable with our outlook for another modest tick up in sales (quarter-to-quarter) in light of continued semi shortages (particularly for mature nodes) as well as what appears to be strong initial demand for the iPhone,” Bryson said.
TSM Stock Moving Sideways
TSM stock hit a record high of 142.20 on Feb. 16 before drifting lower. After reaching its 2021 low near 107.90, it has moved mostly sideways as semiconductor manufacturing stocks fell out of favor with investors.
TSM stock ranks No. 18 out of 39 stocks in IBD’s Semiconductor Manufacturing industry group, according to IBD Stock Checkup. It has an IBD Composite Rating of 65 out of 99. IBD’s Composite Rating combines five separate proprietary ratings into one easy-to-use rating. The best growth stocks have a Composite Rating of 90 or better.
The Semiconductor Manufacturing group ranks No. 112 out of 197 industry groups that IBD tracks. Six months ago, it ranked No. 79.
In a negative sign, TSM stock currently trades beneath its 50-day and 200-day moving averages, according to IBD MarketSmith charts.
Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
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