Taiwan Semi Reports Early, Above Expectations

After an accidental release, the chip giant posts results three days ahead of schedule.
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Updated from 11:35 a.m. EDT

Leading global foundry

Taiwan SemiconductorManufacturing

(TSM) - Get Report

, which accidentallyreleased its results three days ahead of schedule Tuesday morning, beat Wall Street earnings expectations by2 cents.

However, TSM shares were recently down21 cents, or 1.9%, to $10.73.

The company's March-quarter sales jumped 46.2%from last year's levels to $1.72 billion, about inline with expectations for $1.75 billion. Sales weredown only 0.5% from the prior quarter.

Net income totaled $561 million, or 14 cents ashare, 2 cents ahead of expectations.

Taiwan Semi explained that part of its financialstatement had been unintentionally released in Taiwanseveral days ahead of schedule, so the company decided torelease its full report this morning.

The company will reportedly give June-quarterguidance at its originally scheduled conference callon Friday. The Wall Street consensus estimatestands at sales of $1.92 billion with earnings of 14 cents.

"Profitability has been up pretty strongly andthat's clearly a positive," said Bill Ong, an analystat American Technology Research. He wasn'tsurprised with the results, since his own research andcomments from TSM suggest the company has been drawingon 95% to 100% of the capacity in its waferfabrication plants.

Taiwan Semi, which manufactures chips used ineverything from cell phones to graphics, has latelyseen broad-based demand across the semiconductormarket. In light of relatively strong visibility, Ongsaid he expects Taiwan Semi to give "a pretty upbeatoutlook over the next couple of quarters." (His firmdoesn't do investment banking.)

It's not clear how that will translate into theshare price, which is up only about 7% year to date.Despite positive fundamental trends in its business,TSM's stock has been constrained by macro events suchas political uncertainty surrounding the presidentialelection in Taiwan and a flurry of publicity over thepublic offering of Chinese rival

SemiconductorManufacturing International Corp

(SMI)

.

On Monday, SMI delivered a solid earnings report,announcing that it swung to a quarterly profitcompared to a loss in the same quarter a year ago. Italso offered a fat upside surprise on gross margin, which jumped to 32% from 21% in the priorquarter, helped by a spike in average selling pricesand a fab utilization rate of 99%.

SMI shares were recently up 1 cent, or 0.07%, to $13.46.