Earnings Miss: United Microelectronics Corporation Missed EPS By 5.6% And Analysts Are Revising Their Forecasts

United Microelectronics Corporation (TWSE:2303) shareholders are probably feeling a little disappointed, since its shares fell 3.2% to NT$40.20 in the week after its latest yearly results. It looks like the results were a bit of a negative overall. While revenues of NT$232b were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 5.6% to hit NT$3.80 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

See our latest analysis for United Microelectronics

Taking into account the latest results, the consensus forecast from United Microelectronics' 18 analysts is for revenues of NT$246.8b in 2025. This reflects a satisfactory 6.2% improvement in revenue compared to the last 12 months. Statutory earnings per share are forecast to shrink 5.2% to NT$3.56 in the same period. Before this earnings report, the analysts had been forecasting revenues of NT$248.6b and earnings per share (EPS) of NT$4.09 in 2025. So there's definitely been a decline in sentiment after the latest results, noting the substantial drop in new EPS forecasts.

The average price target fell 8.5% to NT$46.60, with reduced earnings forecasts clearly tied to a lower valuation estimate. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on United Microelectronics, with the most bullish analyst valuing it at NT$70.00 and the most bearish at NT$32.00 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that United Microelectronics' revenue growth is expected to slow, with the forecast 6.2% annualised growth rate until the end of 2025 being well below the historical 8.3% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 16% per year. Factoring in the forecast slowdown in growth, it seems obvious that United Microelectronics is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of United Microelectronics' future valuation.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple United Microelectronics analysts - going out to 2027, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 1 warning sign for United Microelectronics that you should be aware of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.