GFS.US Q3 beats expectations, Q4 guidance highlights optimistic outlook

GlobalFoundries (GFS.US) released its third-quarter earnings before the market opened on November 5. The data showed that the company's Q3 revenue fell 5.9% YoY to $1.739 billion, topping the consensus estimate of $1.722 billion, and its non-GAAP EPS was $0.41, topping the consensus estimate of $0.33. In addition, the company provided an optimistic outlook, and its stock price soared more than 12% before the market opened on Tuesday, and as of the writing, it rose 11% before the market opened.

GlobalFoundries' strong performance was attributed to consistent execution and key design wins in its chip technology portfolio. The company leveraged its 22FDX process technology platform to forge a new collaboration with NXP Semiconductors (NXPI.US). The collaboration will optimize NXP's solutions for power, performance, and time-to-market in a range of automotive, IoT, and smart mobile devices. GlobalFoundries' 22FDX chips will be produced in Dresden, Germany, and Malta, New York, providing geographically diversified supply for NXP's customers.

CEO Thomas J. Caulfield said, "We delivered financial results in line with the upper end of the guidance range provided in August." He added that the company still expects to achieve a ~three-fold YoY growth in adjusted free cash flow by the end of 2024.

Looking ahead, GlobalFoundries is optimistic about its fourth-quarter outlook. The company expects revenue to be between $1.8 billion and $1.85 billion, topping the consensus estimate of $1.804 billion. Its adjusted EPS is expected to be $0.29-$0.43, topping the consensus estimate of $0.38.

The strong results and guidance underscore the resilience of GlobalFoundries amid ongoing industry uncertainties. With $4.3 billion in cash and marketable securities, the company seems well-positioned to weather recent challenges while investing in future growth opportunities.