GlobalFoundries Spike 9.4% as Income Nearly Doubles Expectation

GlobalFoundries ( GFS ) has surpassed Wall Street's first-quarter earnings targets and provided better-than-expected guidance for the current period. The Malta-based company earned an adjusted 31 cents a share on sales of $1.55 billion in the March quarter, which was 40% below analysts' expectations of 23 cents a share on sales of $1.52 billion. However, on a year-over-year basis, GlobalFoundries ( GFS ) earnings declined 40% while sales fell 16%.

For the current quarter, GFS expects to earn an adjusted 29 cents a share on sales of $1.615 billion, based on the midpoint of its guidance. Wall Street was modeling for earnings of 29 cents a share on sales of $1.58 billion in the second quarter. In the year-earlier period, GlobalFoundries ( GFS ) earned an adjusted 53 cents a share on sales of $1.845 billion.

GlobalFoundries ( GFS ) is navigating a cyclical downturn in business from fabless chipmakers exposed to the automotive and industrial markets. The company's Chief Executive, Thomas Caulfield, said that as pockets of the semiconductor industry begin to emerge from the inventory correction, their teams are driving foundry innovation and differentiation for customers across their essential end markets.

Shares of semiconductor manufacturer GlobalFoundries ( GFS ) surged after markets opened Tuesday following the release of a first-quarter earnings report that included income nearly doubling analyst expectations. However, GlobalFoundries' financial performance fell year-over-year as the semiconductor market has corrected. The company was also one of the beneficiaries of the CHIPS Act, receiving a $1.5 billion grant from the Biden administration earlier this year to expand its operations in New York and Vermont.

Technical Outlook
GlobalFoundries ( GFS ) Stock is up 7.74% at the time of writing trading with a Relative Strength Index (RSI) of 65.47. The stock is slightly overbought.