Taiwan Semiconductor Manufacturing (NYSE:TSM) gained 3% in early trading Thursday after delivering a beat and raise third quarter, which analysts called "the first clean beat in this downcycle."
Third quarter revenue of $17.28 billion fell 14.6% from last year but was up 10.2% from last quarter. The top-line number beat the consensus of $16.95B.
Diluted earnings per share in the quarter was $1.29, topping the consensus of $1.15.
"Our third quarter business was supported by the strong ramp of our industry-leading 3-nanometer technology and higher demand for 5-nanometer technologies, partially offset by customers’ ongoing inventory adjustment," said Wendell Huang, VP and Chief Financial Officer of TSMC. "Moving into fourth quarter 2023, we expect our business to be supported by the continued strong ramp of our 3-nanomenter technology, partially offset by customers’ continued inventory adjustment."
For the fourth quarter, the company sees revenue of $18.8B-$19.6B, versus the consensus of $18.251B.
Analysts were positive on the print and guidance.
"TSMC delivered what analysts think is its first clean beat of this downcycle, without any downward revision to its outlook," analysts at Needham & Company commented. "The company delivered 3Q23 results exceeding the consensus and guided 4Q23 well above the Street. To some extent, analysts think investor sentiment, if fully reflected by sell-side consensus, has swung too far to the downside, and TSMC's strong results suggest the industry is close to a bottom and about to enter the next cyclical upturn."