GlobalFoundries sales rise while a share-related charge drives a loss
The chipmaker’s preliminary third-quarter figures combine higher revenue and gross margins with weaker cash generation. A noncash charge tied to shares issued to the US government accounted for the reported loss, while adjusted earnings remained positive. Management’s fourth-quarter revenue forecast is above the amount earned in the latest quarter.
Economics & Markets··Midday
Quarterly revenue and adjusted earnings rise
GlobalFoundries announced its preliminary third-quarter earnings and revenue on November 4, with adjusted earnings and revenue above market estimates.[1], [2]
The semiconductor manufacturer earned revenue of 1,899 million dollars, up 13 per cent from 1,688 million dollars a year earlier. Its gross margin under International Financial Reporting Standards (IFRS) rose from 24.8 per cent to 30.1 per cent. Adjusted net income reached 298 million dollars, with adjusted diluted earnings of 0.53 dollars per share.[1]
Shares issued to the US government generate a charge
The reported bottom line was a loss of 270 million dollars, following a profit of 249 million dollars in the comparable quarter. GlobalFoundries attributed the loss primarily to a 441 million dollar charge associated with issuing 9.9 million shares to the US government in September. The charge sat outside operating expenses and involved no cash payment.[1]
Cash flow declines despite higher sales
Operating activities generated 341 million dollars, down from 595 million dollars a year earlier. Capital spending was 301 million dollars and government grants supplied 96 million dollars, leaving adjusted free cash flow of 136 million dollars against 451 million dollars previously. Management forecast fourth-quarter revenue of 2,000 million dollars, plus or minus 25 million dollars. The preliminary results remain subject to financial closing procedures.[1]
