GlobalFoundries Gains 1% as Q3 Earnings Exceed Expectations

Shares of multinational semiconductor contract manufacturing and design company GlobalFoundries, Inc. (GFS) jumped more than 1% in the extended trading session on Tuesday after the company reported higher-than-expected earnings for the third quarter of 2021.

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Based out of New York, GlobalFoundries manufactures chips for mobility, automotive, computing and wired connectivity, consumer Internet of Things and industrial markets.

Q3 Results

The company reported adjusted earnings of $0.07 per share, compared to the Street’s estimate of $0 per share and a loss of $0.58 per share in the year-ago quarter.

Revenues grew 56% year-over-year to $1.7 billion, in line with analysts’ expectations. (See Insiders’ Hot Stocks on TipRanks)

Adjusted EBITDA increased 84% to $505 million, and adjusted gross profit totaled $306 million compared to a gross loss of $134 million reported in the third quarter of 2020.

CEO Comments

The CEO of GlobalFoundries, Tom Caulfield, said, “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. We expect continued revenue and profit growth in the fourth quarter.”

Q4 Outlook

For the fourth quarter of 2021, the company expects revenue in the range of $1.8 billion to $1.83 billion, and adjusted earnings per share (EPS) to lie between $0.09 and $0.13.

The Street expects GlobalFoundries to report revenues of $1.8 billion and EPS of $0.09 during the quarter.

Furthermore, adjusted EBITDA is expected to range from $510 million to $530 million, and adjusted gross profit $344 million to $359 million.

Wall Street’s Take

Overall, the stock has a Moderate Buy consensus rating based on 12 Buys, 2 Holds and 1 Sell. The average GlobalFoundries price target of $77.10 implies 11.4% upside potential. Shares have gained 49.2% over the past year.

Smart Score

According to TipRanks’ Smart Score rating system, GlobalFoundries scores an 8 out of 10, suggesting that the stock is likely to outperform market averages.