Contract chipmaker GlobalFoundries Inc. is up today as its stock rose more than 4% in extended trading after reporting first-quarter earnings and earnings that beat analysts’ forecasts as a he’s taking advantage of the ongoing shortages in the industry.
The company reported earnings before certain costs such as stock-based compensation of 42 cents per share on revenue of $1.94 billion, up 37% from a year ago. This helped it generate a record quarterly net profit of $178 million. Wall Street expected the company to report earnings of just 24 cents per share on sales of $1.9 billion.
Following the report, shares of GlobalFoundries rose in after-hours trading, adding to a slight gain in the regular session earlier in the day.
GlobalFoundries chief executive Thomas Caulfield (pictured) said the company delivered on its commitments to customers and shareholders during the quarter. “Despite challenges in the global supply chain, the GF team continues to execute on its plans, and we remain on track to deliver a solid year of growth and profitability,” he said in a statement. communicated.
GlobalFoundries operates manufacturing facilities for computer chips. “fabs” in industry parlance, which manufacture silicon wafers for other chip vendors, including Advanced Micro Devices Inc., Samsung Electronics Co. Ltd. and Qualcomm Inc. It is said to be the world’s third-largest chipmaker, with five factories worldwide and more than 15,000 employees.
The company manufactures a wide range of silicon, including radio frequency chips for smartphones, as well as chips for smart cars and data center servers.
GlobalFoundries, like most chip companies, has benefited enormously from a global shortage of semiconductors which has allowed it to derive more profit from the products it sells. Proof of this is the company’s adjusted gross margin, which reached a record 25.3% in the quarter, compared to 21.5% in the previous quarter.
GlobalFoundries’ improved profitability is the most likely factor behind its upbeat second-quarter outlook. The company said it expects adjusted earnings of 43 to 48 cents per share on revenue of $1.96 billion to $1.99 billion. Wall Street had expected second-quarter adjusted earnings of just 27 cents a share on sales down $1.93 billion.