GlobalFoundries Tops Earnings Estimates in Sign Chip Demand Persists

(Bloomberg) -- GlobalFoundries Inc., the biggest U.S.-based provider of made-to-order semiconductors, posted quarterly sales and profit that topped analysts’ estimates, a sign it’s benefited from industrywide shortages.

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First-quarter revenue jumped 37% to $1.94 billion, the company said in a statement Tuesday. The company had profit of 42 cents a share, excluding certain items. Analysts projected $1.9 billion and 24 cents on average, according to data compiled by Bloomberg.

The company’s revenue forecast for the current quarter, meanwhile, was roughly in line with projections. Sales will be $1.96 billion to $1.99 billion in the period ending in June. Excluding certain items, profit will be 43 to 48 cents a share. Analysts had predicted sales of $1.93 billion and earnings of 26 cents a share.

GlobalFoundries, majority-owned by the government of Abu Dhabi, is trying to win share in the market for outsourced chip production and gain enough scale to compete with industry leader Taiwan Semiconductor Manufacturing Co. Widespread shortages of components have helped it attract new customers and secure long-term commitments.

The shares gained less than 1% in late trading following Tuesday’s report.

Chief Executive Officer Tom Caulfield and some of his counterparts at other chipmakers have maintained that new uses for semiconductors mean that there will be a period of sustained growth in demand. Caulfield is expanding his factory footprint with upfront payments from customers.

Shares of GlobalFoundries have declined 19% this year, part of a broader selloff for chip-related stocks. The company began life as a publicly traded company last October.

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