GlobalFoundries Stock Drops After Weak Q3 Guidance; Topline Declines Over 7% In Q2

GlobalFoundries Inc GFS reported a second-quarter FY23 revenue decline of 7.4% year-on-year to $1.85 billion, beating the consensus of $1.83 billion.

Adjusted EPS of $0.53 beat the consensus of $0.51. 

The adjusted gross margin expanded by 160 bps to 29.6%, and the adjusted operating margin grew by 70 bps to 18.3%.

The adjusted EBITDA margin declined by 310 Y/Y to 36.2%. GFS generated $546 million in operating cash flow and held $3.3 billion in cash and equivalents.

"Despite the cyclical headwinds impacting our industry and continued macroeconomic uncertainty, we delivered consistent financial performance and generated $146 million of free cash flow in the quarter, as GF's global teams diligently managed costs while driving differentiated solutions to meet our customers' needs, across several critical growth markets," said GlobalFoundries President and CEO Dr. Thomas Caulfield

Outlook: GFS sees third-quarter revenue of $1.825 billion-$1.870 billion versus the $1.88 billion estimate. The company expects adjusted EPS of $0.46-$0.54 versus the $0.52 estimate.

Price Action: GFS shares traded lower by 0.90% at $58.62 at publication Tuesday.

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