Contract chip manufacturer GlobalFoundries Inc. posted strong fourth-quarter results today, with earnings and revenue that beat expectations, in its first earnings report since going public late last year.

The company followed up with a higher outlook that sent its stock up slightly in after-hours trading.

GlobalFoundries reported an operating loss for the period of $491 million. Earnings before certain costs such as stock compensation came to 18 cents a share, as sales rose 74% from a year ago and 9% from the third quarter, to $1.85 billion. Wall Street had been looking for revenue of $1.82 billion and a profit of 11 cents per share.

For the full fiscal year 2021, GlobalFoundries reported sales jumped 36% year-over-year, to $6.6 billion.

GlobalFoundries Chief Executive Thomas Caulfield (pictured) said 2021 had proven to be an “outstanding year” for the company, which managed to capitalize on high demand for semiconductor solutions.

“We made significant progress towards our long-term financial profit model,” he said. “The year was also marked by a growing number of long-term partnership agreements, with 30 customers committing more than $3.2 billion toward the continued expansion of our global manufacturing footprint to support strong demand.”

Caulfield added that GlobalFoundries is now on track to deliver a profit for the first time in 2022.

GlobalFoundries is a semiconductor foundry that makes computer chips for other companies. It’s said to be the third-largest business of its kind in the world, with five manufacturing facilities globally and about 15,000 employees. It makes chips for many of the world’s leading semiconductor firms, including Qualcomm Inc., Samsung Electronics Co. Ltd. and its former parent company Advanced Micro Devices Inc., from which it was spun off in 2009.

It manufactures a wide range of silicon, including radio frequency chips for smartphones. In fact, GlobalFoundries claims its silicon is found in the vast majority of the world’s mobile devices. It also makes chips for other systems such as smart cars and data centers.

GlobalFoundries went public in October via an initial public offering that raised $2.6 billion in funding. It launched on the Nasdaq after talks with Intel Corp. over a possible acquisition fell through. The money raised is being used to fund the expansion of its biggest chip fabrication plant in Malta, New York. It also has plans to build an entirely new fab close to that site.

During the quarter just gone, GlobalFoundries reported its adjusted gross profit margin was 21.5%, swinging from a negative gross margin of 20.5% one year ago and up from 18% in the previous quarter.

Constellation Research Inc. analyst Holger Mueller told SiliconANGLE he thinks GlobalFoundries has turned the corner and is now sailing towards profitability.

“Certainly the high global chip demand has helped GlobalFoundries, but its management also deserves credit for setting the ship on a more viable cost trajectory,” Mueller said. “This will likely pay off for the company, and we agree with its management that it has a real shot at returning to profitability soon.”

Looking to the first quarter, GlobalFoundries said it sees revenue of between $1.88 billion and $1.92 billion, with earnings in a range of 21 to 27 cents per share. In comparison, Wall Street is looking for sales of $1.84 billion and a 23-cent-per-share profit.

Photo: Moor Insights & Strategy