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Chartered Q3 Results (20th Oct 2006)
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billywows
Elite |
25-Oct-2006 23:32
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UMC sama sama outlook as CSM for Q4 ... ------------- TAIPEI, Oct 25 (Reuters) - Taiwan's UMC (2303.TW: Quote, Profile, Research), the world's second-largest contract chip maker, saw its quarterly profit quadruple from a year ago, beating estimates, but predicted a fall in prices and shipments in the fourth quarter. With customers busy clearing out swollen inventories, United Microelectronics Corp. (UMC) forecast fourth-quarter wafer shipments would fall 2 to 3 percent from the previous three months, with average selling prices dropping 5 to 6 percent. That would help drag UMC's (UMC.N: Quote, Profile, Research) gross profit margin down to around 20 percent in the fourth quarter from 24.5 percent in the third quarter. "For Q4, we do foresee some downward adjustment from certain advanced technology customers," UMC Chairman and Chief Executive Officer Jackson Hu said, referring to customers in the communication sector. On Monday, Texas Instruments Inc. (TXN.N: Quote, Profile, Research), the world's biggest maker of mobile phone chips and one of UMC's major clients, gave a disappointing outlook for the fourth quarter, saying sales of its chips for high-end cellphones were worse than expected going into the holiday shopping season. ========== |
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billywows
Elite |
25-Oct-2006 22:51
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Haha! Just call me Billywows can liao, Zujzuj. CSM forcasted a surprising lower Q4 earnings last week (to be out on 19th Jan '07). This is despite its MSFT's xBox 360 and AMD's chip tie-up for this coming Christmas season. That's why I think this counter will ding-dong till early next year as investors await the release of MSFT's Vista to boost PC sales and will speculate on it. Its a wait & see game for now. My take is max 1.40 by Q4. However, its new 45nm technology with IBM, Infineon and Samsung by end 2007 will boost its status by Year 2008. Check out below: http://www.marketwatch.com/News/Story/Story.aspx?guid=%7BE2B8CE3F%2D196E%2D4073%2DAA6B%2DD35BDEB94320%7D&siteid=mktw&sid=159499&symb= |
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zujzuj
Senior |
25-Oct-2006 22:23
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Master Billywows, Can share more about how you come to this conclusion ? Thankz !! |
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zujzuj
Senior |
25-Oct-2006 22:23
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Master Billywows, Can share more about how you come to this conclusion ? Thankz !! |
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billywows
Elite |
25-Oct-2006 22:11
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For long term (at least till Year 2008), CSM looks like a bargin now. For quickie trade, its too volatide for the next 6 months. Trade with care. |
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singaporegal
Supreme |
25-Oct-2006 22:03
Yells: "Female TA nut" |
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caution with chartered... trend unclear and bollinger bands tight - sudden price change may occur soon |
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chipchip66
Master |
24-Oct-2006 19:06
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u are rite, will move up strongly above $1.30. |
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singaporegal
Supreme |
24-Oct-2006 14:43
Yells: "Female TA nut" |
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I read the signals as being mixed. Bollinger bands quite tight meaning some sudden price change is going to occur. |
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Nostradamus
Supreme |
23-Oct-2006 21:34
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CIMB-GK says it has raised its target price to $1.39 from $1.36 after increasing its estimates of earnings for the chip maker for the next three years. "Despite guidance for a sequentially weaker fourth quarter from ongoing inventory corrections among customers, we have raised our 2006-2008 earnings estimates by 18-38%," CIMB-GK analyst Khoo Chen Hsung said in a note. The brokerage now expects Chartered to post a net profit of US$65.9m this year, US$123.9m next year and US$140.1m in 2008. "We expect the earnings growth to be propelled by volume and margin expansion from 65 nm ramps for new customer programs, especially in the second half of 2007," Khoo said. |
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mwzl95
Member |
21-Oct-2006 11:58
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I'm getting a buy from the charts but RSI not so good. |
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chipchip66
Master |
20-Oct-2006 17:43
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Chartered like other tech stocks have now bottomed out and probably see its share price inch up by another 10%-15%. Tech stocks are now riding on another cycle of growth. Expect, Stats,Utac, Global testing riding on this cycle.... |
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Nostradamus
Supreme |
20-Oct-2006 16:38
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It could be headed for an earnings trough in the fourth quarter but should bounce back in the second half of next year as it ramps up production for new customers, analysts said. However, taking out the one-off gains from a change in fair value and the lower depreciation estimates, Chartered actually performed within its own expectations, analysts said. The share price appears to be supported, with investors opting to look beyond the weak earnings expectations in the fourth quarter to the brighter picture painted for Chartered in 2007. "I think the really exciting story for Chartered is next year, especially (in the) second half, given the ramp-up for several new customers, the 65-nm (technology) -- that is the growth driver," CIMB-GK analyst Khoo Chen Hsung said. He favors Chartered over STATS and UTAC, as the expected contribution from new volume production from Chartered's new clients represents one layer of growth that are not evident in the other two semiconductor firms. BNP Paribas analyst Sze Ho Ng agrees with the view that Chartered may see its orders recover from the third quarter given the current pace of inventory correction. He expects Chartered to post net profit next year of US$85 mln from US$50 mln this year, adding this year's estimates may be adjusted to account for the one-off gains in the third quarter. "The fourth quarter will likely be the start of a bottoming out, if not the bottom, for Chartered, because in 2007, the new customers they have lined up will actually provide them with a very strong platform for growth," DBSV analyst Don See said. The fact that Chartered achieved higher gross profit and higher operating margins amidst a decline in capacity utilization, and despite a minimal quarter-on-quarter decline in sales during an inventory, support the view that the chip maker's "operational turnaround is well underway," Merrill Lynch analyst Daniel Heyler said in a note. "Given Chartereds operational turnaround, improving technology position and expanding customer partnerships, we believe the company can generate a long-term return on invested capital (capitalized research & development) of 9%," he said. "The market is likely to buy into these prospective returns as Chartered manages the current slowdown and is able to generate higher returns than seen earlier," Heyler added. |
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Nostradamus
Supreme |
20-Oct-2006 16:33
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It said it is on track to start producing 45-nm chips by the end of next year, which could represent another area of growth for the chip maker. "As far as 45-nm is concerned, low power version will be entering pilot production in December 2007," president and CEO Chia said after the company announced third-quarter results. "It's too early to comment on the outlook (for 45-nm), but what is critical is we yet again are able to compress the timing of introduction to get into the timing window of where our customers want us to be," he added. The Singapore-based chip maker said earlier it was working with IBM Corp, Infineon Technologies and Samsung Electronics to produce 45-nm chips. Its average selling price per wafer was 4.3% higher at US$1,136 compared to the second quarter due to a richer product mix, although capacity utilization fell to 74% in the third quarter from 82% in the previous quarter. For the current quarter, however, Chartered expects capacity utilization to drop even further to between 67% and 73% due to weakness in the consumer and communications sector of the business. Nevertheless, Chia said the company expects group revenue for the whole of 2006 to rise by 35% from US$1.03b in 2005. Going into 2007, Chia said he was "excited" about the firm's prospects amid the improving inventory situation in the semiconductor industry. "On the macro side, oil prices have eased to around US$60 a barrel and the interest rate environment seems reasonably positive. This should aid the holiday season sell-through and enable customers to lower their inventory levels further, which should be helpful for wafer demand to rebound," Chia said. He said Chartered will continue to diversify its customer base and product offerings. Ideally, he expects to see the company's utilization at 85% or more which should boost gross margin to the required 35% for net income to be in the "high teens or 20%" as a percentage of sales. "One can only do that with diversification in customers and product offering, and it is not something that can be fixed overnight," he said. "It has taken us quite a while to get where we are and we need to continue to push in 2007 and 2008, so that we fully achieve the diversity we need to achieve consistency in our utilization rate. "The industry is improving, the inventory situation is improving, we are moving in the right direction," Chia said. |
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Nostradamus
Supreme |
20-Oct-2006 16:28
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It said net profit for the three months to September reached US$24.43 mln, against a loss of US$34.51 mln in the same period last year, thanks to higher wafer shipments, better prices and lower depreciation cost. Its profit nearly doubled from the US$12.32 mln it made in the second quarter, topping market estimates of between US$10.5 mln and US$12.6 mln based on an XFN-Asia poll which was around the midpoint of the semiconductor foundry's own projection of US$6-16 mln. The profit surprise came despite a 2.1% decline in sales from the second quarter to US$355.33 mln, and below Chartered's estimated range of US$356-368 mln. But revenue was up 22.5% yoy. Chartered said it expects sales to fall to the US$332 mln-344 mln range in the current quarter with net profit estimated between US$0-10 mln. Despite the weak outlook for the last quarter of 2005, analysts were generally upbeat for Chartered in the coming year as the company boosts production for new customers. CIMB-GK analyst Khoo Chen Hsung said he is not inclined to change his "outperform" rating on Chartered but will review his target price of $1.17. "I think these results continue to show that they continue to make progress in the advance nodes. I don't foresee any changes in my rating," Khoo said. He prefers Chartered over STATS and UTAC, bullish on its production ramp up for clients in the 65-nm node business. "Pending further updates from this morning's conference call, we are putting our 'hold' rating and $1.33 fair value under review," OCBC analyst Carey Wong said "Its net profit was much better than our forecast of US$11.6 mln, but we note that this is due to US$10.2 mln gain from changes in fair value of interest rate swap versus US$7.8 mln loss in the previous quarter," he said. DBS Vickers analyst Don See said: "Near-term it (Chartered) is not particularly exciting but I think there is a positive bias in the underlying statements." See is reviewing his "hold" call on Chartered and target of $1.50. "I think I am not going to recommend on a quarterly basis but look further. Basically, my hypothesis is a good year for Chartered next year." |
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singaporegal
Supreme |
20-Oct-2006 13:51
Yells: "Female TA nut" |
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As I mentioned some days back... be cautious with Chartered... |
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allantanhc
Veteran |
20-Oct-2006 13:42
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Trade with care. Not too positive. CSM reported Q306 net profit of $24.4m compared with $34.5m loss a year earlier. (Bloomberg median consensus see net profit of $12m/ Credit Suisse consensus see Q306 net profit of $11m on sales of $362m/ Reuters consensus see sales of $371.8m) Q306 sales rose to $355.3m from $290.1m. CSM cited the new chips accounted for 54% of total sales. CSM forecasted Q406 earnings -81.13% yoy to about $5m on sales of about $338m compared with $26.5m in Q405. *AMD expressed profitability was cut by a price war with larger rival Intel Corp. AMD cited slashing prices as competition build up with Intel. AMD see Q306 margin narrowing from 56.8% to 51.4%. Sales -13% to $1.33b after the company spun off its memory-chip business last year. (Thomson Financial forecasted an avg of 24cts and sales of $1.3b) However, JP Morgan downgraded AMD from "Neutral" to "Underweight". * UBS recently cited CSM facing slower growth, as some companies delay orders because of overestimation in demand for their products. UBS cited customers have already scaled back wafer starts to adjust for slower micro conditions and too optimistic forecasts from the earlier part of this year. OIR cited suspecting CSM's customers are still taking some time to digest the current inventory situation and other uncertainties brought on by higher oil prices, slowing demand and the situation in the Middle East, despite reports of earlier than expected shipment of chips to AMD. OIR sees good chance of CSM getting more orders from AMD, especially in the wake of reports that Dell may use up to 20m AMD processors inits servers, desktop PCs and notebooks between Q406 and Q407. As for CSM's other major customer, Microsoft, OIR warned that its Xbox 360 orders could continue to slow in the wake of the much-anticipated launch of Sony's PS3 in November. OIR also believes that any real ramp up for Fab 7 and its 65nm business would be in H207. The recent collaboration with IBM, Infineon and Samsung to develop optimised product solutions using the advanced 45nm low-power process is only expected to be installed and fully qualified at their 300mm fabs by the end of 2007, so OIR think it is still too early to price in its impact now. Macquarie cited seeing AMD's success in the marketplace as a strong stock price catalyst for CSM. But now AMD is also beginning to face a strong price war with Intel (INTC) thus affecting its overall margin. * Most bearish call came from ABN Amro with a "Sell" Call and a price target of $1.07. While the rest are bullish mainly because of its business contribution from AMD, which had just been downgraded for slashing its prices. |
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rabbitfoot
Veteran |
20-Oct-2006 09:46
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Going up ? How interesting... |
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billywows
Elite |
20-Oct-2006 07:34
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Lower Q4 forcasted ..... SIGH! The company sees fourth-quarter net earnings of $5 million, plus or minus $5 million, or 1 cent, plus or minus 2 cents, per basic ADS. Chartered sees revenues for the period of $338 million, plus or minus $6 million.  |
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billywows
Elite |
19-Oct-2006 22:29
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Wah leow ... AMD down 10% tonite after yesterday's Q3 earnings! Hmmm, let's see what CSM will pull out in its Q3 in 8 hours time! Hope it's not so FLAT as so much expected ... |
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ozone2002
Supreme |
19-Oct-2006 15:09
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Chartered Semiconductor Manufacturing (CSM SP/CSMF.SI, OUTPERFORM, S$1.17, Target: S$1.36) Company update - Growing earnings with lower risk by Khoo Chen Hsung Chartered is positioned for strong earnings growth from customer ramps. It has begun ramping production for AMD at 90nm node in 3Q06 and is scheduled to begin 65nm production for several new customers in FY07. Ensuing volume growth and shift towards higher-margin advanced nodes is set to boost earnings. Risk is also reducing at Chartered. IBM partnership has significantly improved technology prospects up to 45nm and R&D efficiency. Broadening customer base also reduces earnings risk. We expect 3Q06 earnings to be in-line with guidance at US$10.5m. Upgrading to Outperform from Underperform with target price of US$1.36 (mid-trough P/B valuation at 1.25x FY07). |
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