GlobalFoundries Inc., the largest US supplier of made-to-order semiconductors, rose the most in almost nine months after third-quarter earnings topped analysts’ estimates, showing it can preserve profit even as the industry slump drags on.

Excluding some items, profit was 55 cents a share in the period, the company said in a statement Tuesday. Analysts had projected 49 cents. GlobalFoundries’ earnings forecast for the fourth quarter also was higher than Wall Street expected, even as its sales outlook came in light.

The semiconductor industry has been coping with a widespread slowdown worsened by a buildup of inventory. Some areas, such as smartphones and personal computers, are showing signs of returning to normal. But others — including industrial and networking gear — have continued to face inventory pileups.

GlobalFoundries is working with customers who have accumulated too much inventory to help reduce those unused stockpiles, Chief Executive Officer Tom Caulfield said. That’s resulting in running factories at less than capacity for now, but it should help to shorten the overall downturn, he said.

The shares rose as much as 9.3% to $56.46 in New York on Tuesday, marking the biggest intraday gain since Feb. 14. They had lost 4.1% this year through Monday’s close, underperforming most of GlobalFoundries’ chip peers.

Though third-quarter net revenue fell 11% to $1.85 billion, that was in line with estimates. Sales will be $1.83 billion to $1.88 billion in the fourth quarter, the company said. That compares with an average analyst estimate of $1.88 billion.

More than 80% of GlobalFoundries is owned by the government of Abu Dhabi, which assembled the business via purchases of various chip companies in an attempt to diversify its economy. GlobalFoundries is now headquartered in the upstate New York town of Malta, where its most modern plant is located.

GlobalFoundries is a much smaller competitor of Taiwan Semiconductor Manufacturing Co., which helped pioneer the industry for foundries — contract manufacturers that make chips for others.

By: DocMemory
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