The past 24 hours have seen the first Triple Plays of earnings season from Taiwan Semiconductor Manufacturing (TSM) and Crown Castle (CCI). Both companies reported strong quarters, and the common theme between the two was 5G.
TSM reported before the opening bell with a 2 cent EPS beat and the company’s widest beat in revenues since October of 2016. Revenues were also up 3.3% from last year’s Q2 report which the company credited to stronger demand across the board. TSM highlighted their high-performance computing (HPC) and smartphone segments as the top growth areas thanks to accelerated 5G implementation. This triple play was a pleasant change of pace for TSM seeing as the company lowered guidance in eight of its last ten quarters. Midday, the stock is up just over 3.4% which isn’t far off from the average 3.73% move the stock sees following its past earnings reports.
Crown Castle (CCI) is one of the major cell-tower plays in the US. Reporting after the close yesterday, the company reported EPS of $1.44, 5 cents above estimates. Revenues grew 11% year-over-year, beating analyst forecasts by almost $55 million. This was the first triple play for CCI since its January 2015 report.
As with TSM, CCI’s business is obviously highly intertwined with the broader trend of growth in smartphone usage. As such, the still early but accelerating growth of 5G implementation in addition to the continued growth of the 4G network helped to bolster the quarter’s results. Despite this, the stock has traded lower in reaction, falling over 4% intraday. The last time the stock responded this poorly to earnings was in October of 2014 when it fell 6.15%. One potential reason behind the negative reaction is the company forecasted deployment of small cells, which is a way of implementing 5G, to be at the lower end of the prior guidance range due to slowdowns in construction timelines. Granted, this is somewhat of a high-quality problem as the company reported the slowdown essentially being a result of strong demand. In its results, CCI stated the increased construction timeline was caused by a “significant increase in small cell deployments [which] is straining the response time of municipalities and utilities.”