GlobalFoundries hits the ground running, beating expectations in first earnings call since IPO

The chip contract manufacturer GlobalFoundries Inc. posted strong fourth quarter results today, with earnings and revenue that beat expectations, in its first earnings call since going public late last year.

The company followed up with a higher outlook that sent its stock up slightly in after-hours trading.

GlobalFoundries reported an operating loss for the period of $491 million. Earnings before certain costs such as stock compensation came to 18 cents per share on revenue of $1.85 billion, up 74% from a year ago and 9% from the previous quarter. Wall Street had been looking for revenue of just $1.82 billion and a profit of 11 cents per share.

For the full fiscal year 2021, GlobalFoundries reported sales of $6.6 billion, up 36% year-over-year.

GlobalFoundries Chief Executive Thomas Caulfield (pictured) said 2021 had proven to be an “outstanding year” for the company, which managed to capitalize on high demand for semiconductor solutions.

“Our revenue grew 36% year-over-year and we made significant progress towards our long-term financial profit model,” he continued. “The year was also marked by a growing number of long-term partnership agreements, with 30 customers committing more than $3.2 billion toward the continued expansion of our global manufacturing footprint to support strong demand.”

Caulfield added that GlobalFoundries is now on track to deliver profitability for the first time in 2022.

GlobalFoundries is a semiconductor foundry that makes computer chips for other companies. It’s said to be the third-largest business of its kind in the world, with five manufacturing facilities globally and around 15,000 employees. It makes chips for many of the world’s leading semiconductor firms, including Qualcomm Inc., Samsung Electronics Co. Ltd. and its former parent company Advanced Micro Devices Inc., from which it was spun off in 2009.

It manufactures a wide range of silicon, including radio frequency chips for smartphones. In fact, GlobalFoundries claims its silicon is found in the vast majority of the world’s mobile devices. It also makes chips for other systems such as smart cars and data centers.

GlobalFoundries went public in October via an initial public offering that raised $2.6 billion in funding. It launched on the Nasdaq after talks with Intel Corp. over a possible acquisition fell through. The money raised is being used to fund the expansion of its biggest chip fab in Malta, New York. It also has plans to build an entirely new fab close to that site.

During the quarter just gone, GlobalFoundries reported its adjusted gross profit margin was 21.5%, swinging from a negative gross margin of 20.5% one year ago and up from 18% in the previous quarter.

Looking to the first quarter, GlobalFoundries said it sees revenue of between $1.88 billion and $1.92 billion, with earnings in a range of 21 cents to 27 cents per share. In comparison, Wall Street is looking for sales of just $1.84 billion and a 23 cent per share profit.

Photo: Moor Insights & Strategy