Chartered Semiconductor (CHRT) Sees Lower Q2 Gross Profit

June 9, 2008 6:11 PM EDT

Chartered Semiconductor Manufacturing Ltd. (Nasdaq: CHRT) updated its second quarter 2008 guidance, which was originally provided on April 25, 2008.

"Our business outlook remains essentially unchanged relative to our expectations in April when we provided our guidance for the quarter. Two additional 65 nanometer customers that were expected to enter production this quarter have successfully done so and we continue to expect the momentum at that node to continue into the latter half of the year as more products enter into production. For the second quarter, we are reiterating our guidance for revenues at the Chartered level and revenues including our share of Silicon Manufacturing Partners," said George Thomas, senior vice president & CFO of Chartered.

"However, we expect our gross profit to be lower by approximately $15 million compared to the mid-point of our prior guidance, due to increased costs. Approximately $9 million of the cost increase is attributable to a less favorable build-up of work-in-progress inventory, approximately $3 million to higher depreciation in Fab 3E as a result of the valuation exercise that is in progress and approximately $2 million to a weaker US dollar. Despite the lower gross profit we are reiterating our net income guidance due to a tax credit that is expected to offset that decline. Our guidance for average selling prices, utilization and earnings per American Depositary Share remains unchanged."

Chartered Semiconductor Manufacturing Ltd. (Chartered) is a semiconductor foundry, which provides wafer fabrication services and technologies to semiconductor suppliers and systems companies.[SM]

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