Contract chipmaker GlobalFoundries on Tuesday delivered in-line to better-than-expected results for the fourth quarter but guided well below views for the current period. GFS stock fell on the news.
The Malta, N.Y.-based company earned an adjusted 64 cents a share on sales of $1.85 billion in the December quarter. Analysts polled by FactSet had expected earnings of 59 cents a share on sales of $1.85 billion. However, on a year-over-year basis, GlobalFoundries earnings fell 56% while sales declined 12%.
For the current quarter, GlobalFoundries forecast adjusted earnings of 23 cents a share on sales of $1.52 billion. That's based on the midpoint of its outlook. Analysts had been looking for earnings of 47 cents a share on sales of $1.77 billion in the first quarter. In the year-earlier period, GlobalFoundries earned 52 cents a share on sales of $1.84 billion.
In a news release, Chief Executive Thomas Caulfield noted the company's growth in the automotive chip market. GlobalFoundries generated over $1 billion in revenue from the automotive market in 2023, he said. The company's total sales were $7.4 billion last year.
On the stock market today, GFS stock retreated 2.1% to close at 54.66.
Lattice Rises After Q4 Report
Elsewhere among semiconductor stocks, Lattice Semiconductor posted mixed results for the fourth quarter and offered a weak outlook.
However, on Tuesday, LSCC stock rose 1.8% to close at 72.30.
The Hillsboro, Ore.-based company late Monday said it earned an adjusted 45 cents a share on sales of $170.6 million in the December quarter. Analysts had expected earnings of 45 cents a share on sales of $176.2 million.
For the current quarter, Lattice expects revenue of $130 million to $150 million. The midpoint of $140 million was significantly below Wall Street's target of $174.4 million for the first quarter.
"Despite near-term cyclical industry headwinds, we continue to be well positioned for the long-term with a rapidly expanding product portfolio and strong customer momentum," Chief Executive Jim Anderson said in a news release.
Lattice makes low-power programmable chips for communications, computing, industrial, automotive and consumer markets.
GFS Stock Has Poor Composite Rating
GlobalFoundries and Lattice Semiconductor are the latest in a parade of chipmakers to guide analysts lower for the March quarter. Other semiconductor stocks in the same camp have included Onsemi and Microchip Technology.
Chipmakers offering soft guidance are those exposed to the industrial, automotive and communications infrastructure markets. Semiconductor stocks that have bucked the trend have been those tied to the booming artificial intelligence market and the recovering smartphone market.
Lattice ranks tenth out of 38 stocks in IBD's fabless semiconductor industry group, according to IBD Stock Checkup. LSCC stock has an IBD Composite Rating of 86 out of 99.
Meanwhile, GlobalFoundries ranks No. 17 out of 32 stocks in IBD's semiconductor manufacturing industry group. GFS stock has a poor IBD Composite Rating of 33.
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