* UMC sales hit two-year high in September
* Q4 sales seen slow after strong Q3
* UMC, TSMC stocks fall before results (Recasts, adds details)
By Baker Li
TAIPEI, Oct 8 (Reuters) – Solid September sales at UMC (2303.TW), the world’s No.2 contract chipmaker, showed stronger demand for technoology products that could have helped the Taiwan company book a bigger profit in the third quarter.
However, analysts have widely expected UMC’s (UMC.N) fourth-quarter sales to be flat or to decline slightly from the strong third quarter even though it ramped up production of new chips by using more efficient technology to cut costs.
United Microelectronics Corp (UMC) said on Thursday it recorded sales of T$9.536 billion ($297 million) last month, up 18 percent from a year earlier, to the highest level in two years.
Before the results, UMC’s Taipei-listed shares fell 3.14 percent on Thursday, exceeding the main TAIEX’s 1.38 percent drop. Sector leader TSMC (2330.TW) (TSM.N), whose September sales are due to be released on Friday, fell 1.93 percent.
UMC shares have doubled so far this year, while Citigroup said the stock was not attractive based on a price-to-book ratio of 1.1 times its earnings forecast. Citi also expressed concerns about growing pricing competition into next year.
“UMC faces the risk of larger order cuts from October as many of its key local fabless customers could see a larger drop in demand in October to December,” Citi semiconductor analyst Andrew Lu said in a Wednesday report.
Around 60 percent of UMC’s sales come from chips for communications products, such as mobile phones, and the company sells nearly 80 percent of its chips to fabless chip companies, including Mediatek Inc (2454.TW).
“TSMC, to stop overflow orders to competitors, and Globalfoundries, striving to be No.2 foundry globally, are both expected to be aggressive in adding capacity and cutting wafer prices to compete against UMC in 2010,” Lu said.
A month ago, Abu Dhabi’s state-owned ATIC offered to buy Singapore’s Chartered Semiconductor (CSMF.SI), which is likely to be merged with California-based Globalfoundries and could create a major rival to TSMC and UMC. [ID:nT37096]
UMC’s July-September sales totalled T$27.41 billion, up 21 percent from the previous three months, according to Reuters calculations.
Thomson Reuters I/B/E/S put UMC’s third-quarter net profit at T$2.8 billion, up 81 percent from the second quarter when UMC booked its first net profit in one year.
Both TSMC and UMC are set to release their third-quarter earnings and give guidance for the current quarter later this month.
For a graphic on UMC’s monthly sales, click here (US$1=T$32.1) (Reporting by Baker Li, Editing by Chris Lewis)
BETHESDA, Maryland (AP) — Marriott International says it lost $466 million in its third quarter on hefty impairment charges, mostly related to its timeshare business.
The hotel operator lost $1.31 per share for the period ended Sept. 11 compared with earnings of $94 million, or 25 cents per share, a year earlier.
Excluding impairment charges of $1.41 per share and other items, adjusted income from continuing operations was $53 million, or 15 cents per share.
Adjusted results surpassed analyst expectations for profit of 13 cents per share.
Revenue fell 17 percent to $2.47 billion. Wall Street expected $2.39 billion.
Marriott expects fourth-quarter adjusted income from continuing operations in a range of 20 to 23 cents per share.
PURCHASE, N.Y., Oct. 8 /PRNewswire-FirstCall/ — PepsiCo, Inc. (NYSE: PEP – News) today reported solid profit performance in the third quarter of 2009, reflecting the company’s balanced approach to investing in value and innovation in key markets as well as productivity and cost discipline across its businesses. Reported EPS was $1.09, and in constant currency the company delivered 5 percent net revenue growth and an 8 percent increase in core EPS.
Indra Nooyi, PepsiCo Chairman and Chief Executive Officer, said “PepsiCo’s diversified food and beverage portfolio and our advantaged business model continued to drive solid results this quarter. Our teams around the world leveraged PepsiCo’s agile go-to-market system to deliver our brands at differentiated value to consumers, who are still feeling the pinch of the global recession despite improving macroeconomic indicators.
“We will continue to make targeted investments across our entire portfolio, and we expect these to ramp up next year as we begin to realize the benefits of the integration of our two anchor bottlers. These investments in innovation, infrastructure, key markets and people development, coupled with our operating agility and focus, give me great confidence in both the near-and long-term growth prospects of PepsiCo,” Nooyi continued.
Richard Goodman, PepsiCo Chief Financial Officer said, “As we prepare for 2010, we are targeting EPS growth of 11 to 13 percent in core constant currency. As we progress through 2010, if we do better than this range we will take the opportunity to make additional strategic broad-based investments in our business to enhance our competitiveness. ”
*Please refer to the Glossary for definitions of constant currency and core. Core results and constant currency core results are non-GAAP financial measures that exclude certain items. Please refer to “Reconciliation of GAAP and Non-GAAP information” in the attached exhibits for a description of these items.
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