Key Takeaways
- Shares of semiconductor manufacturer GlobalFoundries surged as markets opened Tuesday on the back of a first-quarter earnings report that included income nearly doubling analyst expectations.
- However, GlobalFoundries’ financial performance fell year-over-year as the semiconductor market has corrected.
- The company was also one of the beneficiaries of the CHIPS Act, receiving a $1.5 billion grant from the Biden administration earlier this year to expand its operations in New York and Vermont.
Shares of semiconductor maker GlobalFoundries (GFS) jumped after markets opened Tuesday following the release of a first-quarter earnings report that beat expectations.
Financial Metrics Fall Year-Over-Year, But Income Nearly Doubles Estimates
Despite falling from last year’s first-quarter levels, GlobalFoundries’ net income of $134 million, or 24 cents per share, nearly doubled analyst expectations of $73.96 million and 13 cents per share, according to estimates compiled by Visible Alpha. Last year, it reported $254 million in profit, or 46 cents per share.
Revenue also fell year-over-year to $1.55 billion from last year’s mark of $1.84 billion, but topped estimates of $1.52 billion.
For the current quarter, GlobalFoundries projects revenue from $1.59 billion to $1.64 billion, with net income of $78 million to $146 million, or 14 cents to 26 cents per share.
GlobalFoundries Set to Receive Billions in CHIPS Act, New York State Funding to Expand Capacity
“As pockets of the semiconductor industry begin to emerge from the inventory correction, our teams are driving foundry innovation and differentiation for our customers across their essential end-markets,” GlobalFoundries Chief Executive Officer (CEO) Dr. Thomas Caulfield said. “We are delighted with the awards from both the U.S. Department of Commerce and New York State to expand our manufacturing capability in the United States, which will complement our unique global capacity offering.”
The company manufactures semiconductors, which are used across a number of industries from smartphones to powering the electronics systems inside cars and other vehicles.
The chipmaker has been one of the beneficiaries of the Biden administration’s goal of making the U.S. a semiconductor manufacturing power, receiving $1.5 billion in CHIPS Act funding earlier this year to build a new facility in New York and expand its operations in Vermont. The state of New York also pledged about $600 million for GF’s New York facilities.
Tens of billions have been handed out from the CHIPS funding so far, to GlobalFoundries as well as a number of its competitors, including Intel (INTC) and Taiwan Semiconductor Manufacturing Company (TSM).
GlobalFoundries shares were up about 9.4% to $54.38 at 9:49 a.m. ET Tuesday, but have fallen about 10% so far this year.
Correction—May 7, 2024: This article has been updated to correct a reference to which quarter results were from.