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Technology Stocks : Semi Equipment Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Return to Sender who wrote (516)	4/29/2001 11:48:37 AM
From: Return to Sender	Read Replies (1) \| Respond to of 95730

TSMC profits slide, sees darkness before dawn biz.yahoo.com (UPDATE: Recasts, adds chairman's quotes, detail) By Michael Kramer TAIPEI, April 27 (Reuters) - Taiwan Semiconductor Manufacturing Co (TSMC) (NYSE:TSM - news), the world's largest contract chipmaker, posted lower profits than expected for the first quarter on Friday and warned sales would continue to slide in the second quarter. But company chairman Morris Chang said April's new orders on the books exceeded billings for sales for the first time since October, and he stuck to a forecast that business would begin improving in the second half of the year. TSMC said it earned T$0.71 (US$0.0215) per share in the January-March period, well below a Reuters survey of six analysts that yielded an average forecast of T$0.83. It was also down from an EPS of T$1.84 in the final three months of 2000 and T$1.32 in the year-ago period, or T$1.01 if last year's figure is adjusted for current share capital. TSMC announced its first quarter results after close of trade on Friday. Its Taiwan listed shares fell T$2.00, or 2.25 percent, to T$87.00, while the broad TAIEX (^TWII - news) index lost 1.85 percent. Chang said April's book-to-bill ratio -- a key leading indicator of future orders -- poked above one for the first time in six months and added his instincts told him springtime was coming. ``My gut feeling...is that this is the first swallow of spring,'' Chang told an analyst conference. ``But this does not mean it won't start raining again next month.'' ``If you look at the macroeconomic side, conversations with clients, and TSMC's past experience -- all these lead me to think that quarter three will be better than quarter two, and quarter four will be better than quarter three,'' Chang said. DARKEST BEFORE THE DAWN Chang saw darkness before the dawn in the April-June period, saying sales would decline another 26 percent from the first quarter's T$39.52 billion, which was itself a 26 percent slide from the final three months of last year. He also said TSMC's closely-watched capacity utilisation rate was ``very likely'' to fall below 50 percent in the second quarter, forecasting a range between 45-50 percent. Many analysts estimate TSMC breaks even on profits and losses at 45 percent utilisation. Chang said he expected net profits to stay positive next quarter. The first quarter's capacity utilisation fell to 70 percent from levels over 100 percent in 2000, squarely in line with Chang's forecast from TSMC's last analyst conference in February. TSMC has said orders dried up suddenly late last year as customer's inventories piled higher after a chip sector slowdown spread from personal computers to mobile telephony, wireline communications and Internet equipment. ANALYSTS STILL WARY Nomura Securities analyst Rick Hsu said Chang's guidance for the second quarter was in line with the assumptions of most analysts, but he was more cautious on expections for the second half of the year. ``Third quarter, nobody knows,'' Hsu said. ``Visability right now is still very low.'' ``Even though Morris said third quarter will be better than second quarter, I'd rather assume a flat utilisation for the quarter but probably with marginal increase,'' he said, figuring in the traditional boom season for consumer electronics in the third quarter and computers in the fourth. Merrill Lynch analyst Dan Heyler also said TSMC could languish at the bottom of a ``U-shaped'' recovery instead of bouncing back quickly in the second half. ``With all this guidance, it looks as though this is a very flat 'U','' said Dan Heyler, Merrill's regional semiconductor analyst. ``This industry will not snap back in one quarter.'' (US$1 equals T$33)