GlobalFoundries stock drops as revenue falls

Shares of GlobalFoundries Inc. (GFS) were declining about 1% in premarket trading Tuesday after the chip foundry company marginally exceeded expectations for quarterly revenue but saw a decline on the metric. The company recorded net income of $254 million, or 46 cents a share, up from $178 million, or 33 cents a share, in the year-prior quarter. On an adjusted basis, GlobalFoundries earned 52 cents a share, up from 42 cents a share a year before and above the FactSet consensus, which was for 50 cents a share. Revenue fell to $1.84 billion from $1.94 billion, while analysts were modeling $1.83 billion. "Despite a challenging business environment, GF's gross margins for the quarter have increased year-over-year due to our continued disciplined focus on profitability by our global team who effectively manage costs, while driving a richer mix of business to our customers," Chief Executive Thomas Caufield said in a release. GlobalFoundries posted a 28.0% gross margin, up from a 24.2% margin a year before. For the second quarter, GlobalFoundries expects $1.81 billion to $1.85 billion in revenue, while analysts had been looking for $1.85 billion. The company also anticipates 46 cents to 54 cents in adjusted earnings per share, compared with the 51-cent FactSet consensus. Raymond James analyst Melissa Fairbanks wrote that "strong growth in Auto was more than offset by sequentially weaker trends in other end markets." The company disclosed that it has appointed Tim Stone, an Amazon.com Inc. veteran, to serve as its next chief financial officer, succeeding David Reeder, "who will leave the company after transitioning to Stone over the coming months."

-Emily Bary

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05-09-23 0849ET

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