Contract chipmaker GlobalFoundries on Tuesday beat Wall Street's targets for the second quarter and guided higher for the current period. But GFS stock fell after the report.
The Malta, N.Y.-based company earned an adjusted 58 cents a share on sales of $1.99 billion in the June quarter. Analysts polled by FactSet expected GlobalFoundries earnings of 45 cents a share on sales of $1.97 billion. In the year-earlier period, GlobalFoundries lost 6 cents a share on sales of $1.62 billion.
For the current quarter, GlobalFoundries forecast adjusted earnings of 62 cents a share on sales of $2.05 billion. That's based on the midpoint of its guidance. Analysts had predicted earnings of 44 cents a share on sales of $1.99 billion in the third quarter. In the year-earlier period, it earned 7 cents a share on sales of $1.7 billion.
"Our revenue grew 23% year over year, and we delivered record profitability, making significant progress towards our long-term financial model," Chief Executive Thomas Caulfield said in a news release. "We remain on track to deliver a strong year of growth and profitability."
GFS Stock Falls After Report
On the stock market today, GFS stock initially rose after the earnings report. But at the close, it dropped 6% to finish at 55.67. The stock market overall was having a down day.
On Monday, GFS stock soared 11.5% to 59.19 after it disclosed an expanded supply agreement with Qualcomm.
In July, GlobalFoundries and STMicroelectronics announced an agreement to create a new, jointly operated semiconductor manufacturing facility in Crolles, France. The new plant will make chips on wafers with a diameter of 300-millimeters.
In May, GlobalFoundries announced major deals to produce chips for Motorola Solutions and the U.S. Department of Defense.
GFS stock ranks No. 11 out of 31 stocks in IBD's semiconductor manufacturing industry group, according to IBD Stock Checkup. It has an IBD Composite Rating of 87 out of 99.
IBD's Composite Rating is a blend of key fundamental and technical metrics to help investors gauge a stock's strengths. The best growth stocks have a Composite Rating of 90 or better.
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