Chipmaker GlobalFoundries Tops Earnings Goal On In-Line Sales

Contract chipmaker GlobalFoundries (GFS) on Tuesday beat expectations for earnings in the third quarter while matching views on sales. But its guidance for the current period was mixed. GFS stock rose in early trading.

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The Malta, N.Y.-based company earned an adjusted 55 cents a share on sales of $1.85 billion in the September quarter. Analysts polled by FactSet had expected earnings of 50 cents a share on sales of $1.85 billion. On a year-over-year basis, GlobalFoundries earnings declined 18% while sales dropped 11%.

For the current quarter, GlobalFoundries forecast adjusted earnings of 59 cents a share on sales of $1.85 billion. That’s based on the midpoint of its outlook. Analysts had been looking for earnings of 53 cents a share on sales of $1.89 billion in the fourth quarter. In the year-earlier period, GlobalFoundries earned $1.44 a share on sales of $2.1 billion.

“Although the global economic and geopolitical landscape remains uncertain, we are collaborating closely with our customers to support their efforts to reduce inventory levels, while growing long-term partnerships to drive foundry innovation and differentiation across essential end-markets,” Chief Executive Thomas Caulfield said in a news release.

GFS Stock Rises After Report

GlobalFoundries revenue now has fallen for three consecutive quarters on a year-over-year basis. Its customers are dealing with a slowdown in demand along with high chip inventories in the sales channel.

In premarket trading on the stock market today, GFS stock advanced 3.6% to 53.50.

Other semiconductor stocks moving on earnings news Tuesday included NXP Semiconductors (NXPI) and Alpha and Omega Semiconductor (AOSL). Both reported September-quarter results late Monday.

Mixed Report From NXP Semiconductors

NXP’s third-quarter results edged above forecasts while its outlook was slightly below views. Alpha and Omega also narrowly topped estimates in the September quarter but its sales guidance missed the mark.

NXP earned an adjusted $3.70 a share on sales of $3.43 billion in the third quarter. Analysts had expected earnings of $3.62 a share on sales of $3.41 billion. On a year-over-year basis, NXP earnings dipped 2% while sales declined a fraction.

For the current quarter, NXP forecast adjusted earnings of $3.65 a share on sales of $3.4 billion, based on the midpoint of its outlook. Analysts were looking for earnings of $3.66 a share on sales of $3.44 billion in the fourth quarter. In the year-earlier period, NXP earned $3.77 a share on sales of $3.31 billion.

AOS Guidance Well Below Views

Alpha and Omega Semiconductor, known as AOS, earned an adjusted 33 cents a share on sales of $180.6 million in its fiscal first quarter ended Sept. 30. Analysts had targeted earnings of 32 cents a share on sales of $180 million. However, on a year-over-year basis, AOS earnings plummeted 73% while sales declined 14%.

For its fiscal second quarter ending Dec. 31, AOS predicted sales of $165 million, vs. Wall Street’s goal of $175.6 million.

NXP ranks third out of 32 stocks in IBD’s semiconductor manufacturing industry group, according to IBD Stock Checkup. GFS stock ranks No. 15 in the group.

Meanwhile, AOS ranks No. 18 out of 37 stocks in IBD’s fabless semiconductor industry group.

In premarket trading Tuesday, NXP stock fell 3.7% to 176.05. AOS stock slid 1.7% to 25.01.

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

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