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To: Clint E. who wrote (34896)	10/26/2001 6:55:02 AM
From: Clint E.	Respond to of 68228

10/26 TSMC Q3 profits beat expectations, better Q4 seen By Michael Kramer TAIPEI, Oct 26 (Reuters) - Taiwan Semiconductor Manufacturing Co (TSMC) (NYSE:TSM - news) on Friday posted better-than-expected profits in the third quarter of 2001 and forecast further improvement in the fourth quarter. The world's largest contract chipmaker said it earned T$0.06 per share in the third quarter of 2001, beating market estimates. A Reuters survey of five analysts yielded an average estimate of T$0.04 for TSMC's third-quarter EPS, edging up from the second quarter's T$0.01 but down from T$1.77 in the same period last year. Chairman Morris Chang saw better days ahead. He expected sales to rise 15 percent in the the fourth quarter from the third quarter, with operating income and net profit ``more than double'' in the October-December period. ``Recovery in the fourth quarter comes at a faster speed than we had expected,'' Chang told a briefing to institutional investors. ``I can make a qualified statement that right now it looks like we have no reason to think the first quarter of 2002 would be worse than the fourth quarter of 2001,'' Chang said. He added capacity utilisation rate in the fourth quarter would be several percentage points higher than 41 percent in the July-September period. TSMC's operating income was T$1.94 billion (US$56 million) in the July-September period, in line with company guidance that the third quarter's operating income would be at least five times greater than the second quarter's T$284 million However, TSMC made a pretax loss of T$200 million due to money-losing overseas subsidiaries, retreating from a T$19.5 billion pretax profit in the year-ago period. Net profit for the third quarter totalled T$1.237 billion, down 93.8 percent from a year ago. TSMC has already disclosed third-quarter sales figures of T$26.94 billion, which improved from T$26.3 billion in the second quarter. Chang, who pledged on Thursday to eventually invest T$700 billion to build another six semiconductor plants in Taiwan, said the money would be spent over the next 10-15 years. But he said capital spending for 2002 would be less than that of 2001. The company has said it would not use all of its $2.2 billion capital expenditure budget for this year due to weak market conditions. The profit figures were announced after close of trade on Friday. TSMC's Taiwan-listed shares rose T$0.50, or 0.8 percent, to close at T$63 against a 0.78 percent gain in the benchmark TAIEX (^TWII - news) share index. Dutch consumer electronics giant Philips Electronics is one of TSMC's largest shareholders. Last month TSMC slashed its 2001 net profit forecast to T$11 billion from the previous estimate of T$25.7 billion. The company earned record profits of T$65.1 billion last year. The semiconductor firm also cut its full-year sales forecast to T$121.9 billion from T$149 billion, and reduced its expected earnings per share to T$0.63 from T$1.50.