We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
GlobalFoundries (GFS - Free Report) has delivered adjusted earnings of 64 cents per share in fourth-quarter 2023, beating the Zacks Consensus Estimate by 8.5%. However, the bottom line declined 56% on a year-over-year basis.
Revenues of $1.85 million topped the Zacks Consensus Estimate by 0.2%. However, the top line dipped 12% year over year.
Weakness across the smart mobile devices, communications infrastructure and datacenter, home and industrial IoT, and personal computing end-markets was a major concern.
Wafer shipments decreased 5% year over year to $552 million in the reported quarter.
Nevertheless, strong momentum in the automotive end market was a positive.
GlobalFoundries Inc. Price, Consensus and EPS Surprise
Smart Mobile Devices: Revenues generated from the market fell 7% year over year to $765 million (41% of the total revenues).
Communications Infrastructure & Datacenter: Revenues from the market decreased 63% year over year to $144 million (8% of the total revenues) in the reported quarter.
Home and Industrial IoT: Revenues from the market were $322 million (17% of the total revenues), down 23% from the year-ago quarter.
Automotive: Revenues from the market were $318 million (17% of the total revenues), up 177% from the year-ago quarter.
Personal Computing: Revenues from the market were $84 million (5% of the total revenues), down 27% from the year-ago quarter.
Non-Wafer and Corporate Other Revenue: Revenues from this category were $221 million (12% of the total revenues), down 10% from the year-ago quarter.
Operating Results
In the fourth quarter, the gross margin was 28.3%, which expanded 130 basis points (bps) year over year.
Operating expenses were $221 million, down 33.5% year over year. As a percentage of revenues, the figure contracted 400 bps year over year.
Selling, general and administrative (SG&A) expenses were $87 million, down 33.1% year over year. Research and development (R&D) expenses were $105 million, down 4.5% year over year.
Adjusted SG&A and R&D expenses were $57 million and $97 million, down 45.7% and 5.8% year over year, respectively.
The adjusted operating margin was 20.7%, expanding 50 bps from the prior-year quarter.
Balance Sheet & Cash Flows
As of Dec 31, 2023, cash and cash equivalents were $2.4 billion, up from $1.9 billion as of Sep 30, 2023.
Long-term debt was $1.8 billion at the end of the fourth quarter, down from $2.2 billion at the third-quarter end.
In the fourth quarter, the company generated $684 million of cash from operations, up from $416 million in the prior quarter.
The free cash flow was $456 million in the reported quarter.
Guidance
For first-quarter 2024, GlobalFoundries expects revenues between $1.50 billion and $1.54 million. The Zacks Consensus Estimate for the same is pegged at $1.75 billion.
Gross profit is expected to be $329-371 million, with a gross margin of 23% at the mid-point.
Adjusted operating profit is anticipated between $120 million and $180 million, with an operating margin of 9.9% at the mid-point.
The company anticipates adjusted earnings per share between 18 cents and 28 cents. The Zacks Consensus Estimate for the same is pegged at 45 cents.
Zacks Rank & Stocks to Consider
Currently, GlobalFoundries has a Zacks Rank #4 (Sell).
Image: Bigstock
GlobalFoundries (GFS) Q4 Earnings & Revenues Beat, Dip Y/Y
GlobalFoundries (GFS - Free Report) has delivered adjusted earnings of 64 cents per share in fourth-quarter 2023, beating the Zacks Consensus Estimate by 8.5%. However, the bottom line declined 56% on a year-over-year basis.
Revenues of $1.85 million topped the Zacks Consensus Estimate by 0.2%. However, the top line dipped 12% year over year.
Weakness across the smart mobile devices, communications infrastructure and datacenter, home and industrial IoT, and personal computing end-markets was a major concern.
Wafer shipments decreased 5% year over year to $552 million in the reported quarter.
Nevertheless, strong momentum in the automotive end market was a positive.
GlobalFoundries Inc. Price, Consensus and EPS Surprise
GlobalFoundries Inc. price-consensus-eps-surprise-chart | GlobalFoundries Inc. Quote
End-Market Details
Smart Mobile Devices: Revenues generated from the market fell 7% year over year to $765 million (41% of the total revenues).
Communications Infrastructure & Datacenter: Revenues from the market decreased 63% year over year to $144 million (8% of the total revenues) in the reported quarter.
Home and Industrial IoT: Revenues from the market were $322 million (17% of the total revenues), down 23% from the year-ago quarter.
Automotive: Revenues from the market were $318 million (17% of the total revenues), up 177% from the year-ago quarter.
Personal Computing: Revenues from the market were $84 million (5% of the total revenues), down 27% from the year-ago quarter.
Non-Wafer and Corporate Other Revenue: Revenues from this category were $221 million (12% of the total revenues), down 10% from the year-ago quarter.
Operating Results
In the fourth quarter, the gross margin was 28.3%, which expanded 130 basis points (bps) year over year.
Operating expenses were $221 million, down 33.5% year over year. As a percentage of revenues, the figure contracted 400 bps year over year.
Selling, general and administrative (SG&A) expenses were $87 million, down 33.1% year over year. Research and development (R&D) expenses were $105 million, down 4.5% year over year.
Adjusted SG&A and R&D expenses were $57 million and $97 million, down 45.7% and 5.8% year over year, respectively.
The adjusted operating margin was 20.7%, expanding 50 bps from the prior-year quarter.
Balance Sheet & Cash Flows
As of Dec 31, 2023, cash and cash equivalents were $2.4 billion, up from $1.9 billion as of Sep 30, 2023.
Long-term debt was $1.8 billion at the end of the fourth quarter, down from $2.2 billion at the third-quarter end.
In the fourth quarter, the company generated $684 million of cash from operations, up from $416 million in the prior quarter.
The free cash flow was $456 million in the reported quarter.
Guidance
For first-quarter 2024, GlobalFoundries expects revenues between $1.50 billion and $1.54 million. The Zacks Consensus Estimate for the same is pegged at $1.75 billion.
Gross profit is expected to be $329-371 million, with a gross margin of 23% at the mid-point.
Adjusted operating profit is anticipated between $120 million and $180 million, with an operating margin of 9.9% at the mid-point.
The company anticipates adjusted earnings per share between 18 cents and 28 cents. The Zacks Consensus Estimate for the same is pegged at 45 cents.
Zacks Rank & Stocks to Consider
Currently, GlobalFoundries has a Zacks Rank #4 (Sell).
Some better-ranked stocks in the broader technology sector are CrowdStrike (CRWD - Free Report) , Badger Meter (BMI - Free Report) and AMETEK (AME - Free Report) . CrowdStrike currently sports a Zacks Rank #1 (Strong Buy), and Badger Meter and AMETEK carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
CrowdStrike shares have gained 26.3% in the year-to-date period. The long-term earnings growth rate for CRWD is projected at 36.07%
Badger Meter shares have gained 15.7% in the year-to-date period. The long-term earnings growth rate for BMI is projected at 12.27%.
AMETEK shares have gained 13.5% in the year-to-date period. The long-term earnings growth rate for AME is projected at 9.19%.