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Semiconductor Manufacturing Sees Higher Revenue but Lower Profits

Shares in SMIC, which is also traded on the Hong Kong stock exchange (HKEX: 981) closed today in New York down 1 cent at $4.39 per ADS.

Peter H. Frank
    Nov 07, 2018 1:11 PM  PT
Semiconductor Manufacturing Sees Higher Revenue but Lower Profits

Semiconductor Manufacturing International Corp. (NYSE: SMI), a leading semiconductor foundry that provides integrated circuit manufacturing services, reported today that its revenue for the third quarter rose more than 10 percent compared with a year ago, though its operating profit slid for the period and it said its outlook was negative. 

The Shanghai-based company, which makes semiconductor wafers for use in a variety of industries, said revenue for the latest three months reached $850.7 million, an increase of 10.5 percent from $769.7 million a year ago, but more than 4 percent lower than the previous quarter. 

The company's net profit for the period sank to $7.6 million, or 2 cents per American depositary share, from $30.6 million, or 3 cents per ADS, a year ago. Results were further hurt by a loss of $28.2 million in the quarter because of foreign currency exchanges given the falling value of the yuan. 

Shares in SMIC, which is also traded on the Hong Kong stock exchange (HKEX: 981) closed today in New York down 1 cent at $4.39 per ADS.

"With the support of our customers and the efforts of our colleagues, our third quarter performance was in line with guidance," Zhao Haijun and Liang Mong Song, SMIC's co-chief executive officers, said in a statement. "When excluding revenue from technology licensing, revenue from our China region continued to grow 40% year over year, and 5% quarter over quarter. Wireless communications, power management and fingerprint IC applications were the major growth drivers. Looking at the full year, our annual revenue target remains unchanged."

The company, which reported that its gross margin was 20.5 percent in the latest period compared with 23 percent a year ago. SMIC said it expected its revenue to decrease between 7 and 9 percent in the fourth quarter while its gross margin continues to fall to between 15 and 17 percent.

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