Chartered Semiconductor Manufac-turing Ltd (特許), the world's third largest contract chip maker, returned to profit after a strong performance last quarter but cautioned yesterday that revenues now faced pressure.
Third-quarter net income was US$24.43 million, or 8 cents per American Depositary Receipt, compared with a US$34.51 million loss a year earlier, Singapore-based Chartered said yesterday. Sales rose 22 percent to US$355.3 million.
The net income was almost double the second quarter figure of US$12.3 million and beat analysts' forecasts for US$10.5 million-US$12.6 million.
Revenue for the quarter rose 22.5 percent to US$355.33 million against US$290.13 million a year earlier, the company said.
Compared with the second quarter this year, however, revenues last quarter fell 2.6 percent from US$364.8 million, primarily due to weakness in the consumer sector, the company said, adding the weakness was partially offset by strength in the computer business.
The sequential downward trend in revenue is expected to continue, Chartered added.
"Based on our current outlook, we expect Chartered revenues ... for fourth quarter 2006 to be down approximately five percent compared to the third quarter," said George Thomas, senior vice president and chief financial officer of Chartered.
"In comparison to the third quarter, we see weakness in the consumer sector, primarily due to a decline in revenues from video game devices and to a lesser extent in the communications sector, partially offset by strength in the computer sector," Thomas said.
Chia Song Hwee (謝松輝), Chartered's president and chief executive officer, said the direction of the company remains unchanged.
"As we continue to focus on customer wins and further broadening our leading-edge engagements, it is important that we make structural improvements, even during a difficult market environment, to reduce the break-even point further," Chia said.
Chartered forecast its factory utilization rate to fall to 70 percent in the fourth quarter from 74 percent in the last quarter.
The company has no plans to build a new factory next year, when it aims to increase capacity at its newest plant, Fab 7, Chia said. Chartered expects monthly production capacity of 15,000 wafers at the factory by the end of the year, short of an earlier estimated 18,000 because of the anticipated slowdown, Chia said.
The company's results may give investors an idea of electronics demand during the Christmas shopping season. United Microelectronics Corp (聯電) is scheduled to report on Oct. 25, and market leader Taiwan Semiconductor Manufacturing Co (台積電) on Oct. 26.