GlobalFoundries Inc. shares rebounded in extended trading today, having initially fallen more than 8% in the wake of second-quarter financial results that topped Wall Street’s expectations.

The company reported net income for the quarter of $317 million, or 48 cents per share, compared with a loss of $30 million one year ago. Earnings before certain costs such as stock compensation came to 58 cents per share, ahead of Wall Street’s forecast of a profit of 45 cents per share.

GlobalFoundries added that its revenue rose 23%, to $1.99 billion for the quarter, just beating Wall Street’s consensus estimate of $1.97 billion.

The company operates computer chip fabrication plants, or “fabs” in industry parlance, that make silicon wafers for other chip suppliers, including Advanced Micro Devices Inc., Samsung Electronics Co. Ltd. and Qualcomm Inc. GlobalFoundries is said to be the third-largest chip fab operator in the world, with five plants globally and more than 15,000 employees. Within those fabs, it manufactures a wide range of silicon chips, including radio frequency chips for smartphones, plus chips for smart cars and data center servers.

GlobalFoundries Chief Executive Thomas Caulfield (pictured) said the company delivered on its commitments to customers and shareholders, shipping a record 630,000 wafers in the quarter, thanks in part to “double-digit growth” at its sites in the U.S. and Europe.

“Our revenue grew 23% year-over-year, and we delivered record profitability, making significant progress towards our long-term financial model,” Caulfield added. “Despite global supply chain challenges, the GF team continues to execute our expansion plans as we build out capacity to meet our customers’ long-term needs. We remain on track to deliver a strong year of growth and profitability.”

Underlining that point, the company offered a strong forecast for the third quarter. It said it’s expecting earnings of between 59 and 65 cents per share on sales of $2.04 billion to $2.07 billion in the period. Wall Street had earlier forecast earnings of just 44 cents per share on sales of $1.99 billion for the third quarter.

GlobalFoundries stock, which fell almost 6% in the regular trading session, dropped by an additional 8% in the immediate aftermath of the report. However, it has since rebounded and is currently trading up 1%.

In a conference call, GlobalFoundries executives said they expect to benefit significantly from the CHIPS Act signed into law today by U.S. President Joe Biden. The legislation includes around $53 billion worth of funding that will be used to build out U.S. chip production capacity, with investments of up to $3 billion per project for new fabs, as well as 25% investment tax credits on new chip tooling in existing fabs. GlobalFoundries Chief Financial Officer David Reeder later told Barron’s that those measures will help the company to fund a planned expansion of its existing fab in Malta, N.Y., and a completely new facility at the same site.

GlobalFoundries had more good news too, saying it has extended an existing deal with Qualcomm that adds more than $7 billion in contracted business until the end of 2028. That follows an announcement in July that the company had signed a definitive agreement with the Dutch chipmaker STMicroelectronics NV to create a new, jointly operated semiconductor fab in Crolles, France. GlobalFoundries said that facility, along with the planned capacity expansion at its existing site in Dresden, Germany, will triple its European production capacity by 2028.

“Globalfoundries is on a run, with record revenue, gross margin, operating margin and net income,” said analyst Holger Mueller of Constellation Research Inc. “Good things come to those that grow and control cost, something Thomas Caulfield’s team has done very successfully. With large contracts looming and the CHIPS act just being passed in the U.S., the prospects are looking up for GlobalFoundries.”

The good news comes at a time when other players in the chipmaker industry are showing less optimism. Earlier today, Micron Technology Inc. warned in a regulatory filing that its revenue for the current quarter will likely be lower than expected. Similarly, Nvidia Corp. said Monday it expects revenue and gross margins to fall short of previously provided guidance.

The semiconductor industry is bracing itself for a turnaround following a two-year-long pandemic boom. As chip shortages abate and customers take stock of existing chip inventories, sales are trending lower. Chipmakers’ stocks have been pressured for much of the year.

GlobalFoundries continued success is in stark contrast to the rest of the chipmaking industry, with its stock still trading almost 20% higher than the $47 from its initial public offering last October.

Photo: GlobalFoundries/YouTube