Chipmaker GlobalFoundries Posts Surprise Profit On In-Line Sales

Contract chipmaker GlobalFoundries (GFS) late Tuesday topped analyst expectations for earnings in the third quarter on in-line sales. It also guided higher for the current period. But GlobalFoundries stock wavered in extended trading.


The Malta, N.Y.-based company earned an adjusted 7 cents a share on sales of $1.7 billion in the September-ended quarter. Wall Street expected GlobalFoundries to lose a penny a share on sales of $1.7 billion, according to FactSet. In the year-earlier period, GlobalFoundries lost 58 cents a share on sales of $1.09 billion.

“Our revenue growth was primarily driven by higher wafer output and continued improvement in mix as our differentiated solutions become a larger portion of our total business,” Chief Executive Tom Caulfield said in a news release. “We expect continued revenue and profit growth in the fourth quarter.”

For the current quarter, GlobalFoundries forecast adjusted earnings of 11 cents a share on sales of $1.82 billion. That’s based on the midpoint of its outlook. Wall Street had predicted earnings of 9 cents a share on sales of $1.8 billion in the December quarter.

GlobalFoundries Stock Wavers

In after-hours trading on the stock market today, GlobalFoundries stock initially rose but later turned south. In recent trades, it was down 1.8%, near 68. During the regular session Tuesday, GlobalFoundries stock dropped 1.8% to close at 69.24.

It was the first quarterly report for GlobalFoundries since the semiconductor foundry went public on Oct. 28. The GlobalFoundries initial public offering priced at $47 a share. GlobalFoundries stock hit a record high of 73.25 on Monday.

GlobalFoundries is the world’s third-largest foundry by revenue behind Taiwan Semiconductor Manufacturing (TSM) and Samsung Electronics. However, GlobalFoundries specializes in making chips with mature technologies while Taiwan Semiconductor and Samsung make cutting-edge chips.

Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.


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