Shares of Chartered Semiconductor Manufacturing Ltd. jumped Monday after the chip maker posted better first-quarter results than Wall Street had expected.
Citigroup analyst Horng Han Low welcomed sales of $388 million, which rose 10 percent sequentially and beat his estimate of $365 million. Sales were built on strong revenue from the communications and consumer chip market while the personal computer chip market was flat, reflecting weak shipments to customer Advanced Micro Devices Inc.
He said the Singapore-based company's outlook suggests it is continuing to break away from AMD and expanding its market.
However, Horng warned that Chartered Semi needs higher production volumes to improve growth. With a tougher economic climate, he recommended selling the stock on its current strength.
He also noted that the company's gross margin is lackluster, which implies that it isn't enjoying the operating leverage that he would like.
Chartered Semiconductor shares jumped 66 cents, or 10.5 percent, to $6.92. They have traded in the last year between $4.70 and $9.16.
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