Taiwan Semiconductor Manufacturing Company


TSM

is scheduled to report third-quarter 2020 results on Oct 15.

For third-quarter 2020, Taiwan Semi anticipates revenues between $11.2 billion and $11.5 billion.

The Zacks Consensus Estimate for third-quarter revenues is pegged at $11.45 billion, suggesting growth of 21.8% from the year-ago quarter.

Further, the consensus mark for third-quarter earnings is pegged at 92 cents per share, indicating an improvement of 48.4% from the prior-year reported figure. Additionally, the estimate has been revised upward by 13.6% over the past 7 days.

Factors to Note

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

The solid demand for the company’s 7-nanometer (nm) technology is expected to have driven the company’s performance in the to-be-reported quarter.

Furthermore, the strong momentum across advanced technologies, which are defined as 16nm and more, is likely to have benefited the company during the quarter under review.

Additionally, its deepening focus toward the full volume production of 5nm islikely to get reflected in the third-quarter results. Also, the growing production of 6nm is expected to have contributed to the to-be-reported quarter’s performance.

Consequently, all these are likely to get reflected in the company’s third-quarter wafer revenues.

Further, Taiwan Semi is expected to have benefited from the uptick in chip design activity. The momentum in 5G smartphone launches might have bolstered the company’s 5G smartphone penetration rate in the quarter under review. Further, the company is likely to have gained strongly froman uptick in high-performance computing (HPC)-related applications.

Additionally, strength across CPU, networking and AI accelerators are likely to get reflected in HPC revenues forthe quarter to be reported.

Also, the third-quarter resultsarelikely to reflect the growing foundry industry and the increasing proliferation of IoT products.

However, the impacts of the ongoing pandemic might get reflected in the to-be-reported quarter’s results. Weak end-market demand and supply-chain disruptions, owing to the COVID-19 outbreak are expected to have acted as headwinds during the third 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.

Taiwan Semiconductor has a Zacks Rank #2 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

.

Stocks to Consider

Here are some companies, which, per our model, have the right combination of elements to post an earnings beat in their soon-to-be-reported quarterly results:

eGain Corporation

EGAN

has an Earnings ESP of +5.88% and sports a Zacks Rank of 1. You can see


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

Alphabet Inc.

GOOGL

has an Earnings ESP of +10.23% and a Zacks Rank of 2 at present.

Fortive Corporation

FTV

has an Earnings ESP of +2.22% and a Zacks Rank of 3, currently.

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