(Reuters) – GlobalFoundries on Tuesday forecast first-quarter revenue and profit below Wall Street estimates as the contract chipmaker braces for the potential impact of U.S. President Donald Trump’s tariffs on automakers and a challenging smartphone market in 2025.
Shares of the Malta, New York State-based company, however, reversed course from its premarket losses to rise nearly 4% in morning trade.
GlobalFoundries expects its first-quarter revenue between $1.55 billion and $1.60 billion. Analysts were expecting $1.66 billion, according to data compiled by LSEG.
The automotive sector, the company’s third-largest revenue segment, is particularly vulnerable to the effects of tariffs on steel and aluminum imports in the United States.
GlobalFoundries signed a long-term agreement with General Motors in 2023 to establish production capacity exclusively for the Detroit-based carmaker at the chipmaker’s Malta facility.
The company’s biggest segment, smartphones, is also under pressure, with the global smartphone market expected to be turbulent in 2025, according to research firm Canalys.
On an adjusted basis, GlobalFoundries expects to earn between 24 cents and 34 cents per share in the first quarter, the mid-point of which is below analyst estimates of 32 cents.
The world’s third-largest chipmaker posted revenue of $1.83 billion in the fourth quarter, which met estimates.
Excluding items, GlobalFoundries posted a profit of 46 cents per share for the fourth quarter, compared with analysts’ expectations of 44 cents.
Earlier this month, the chipmaker appointed Tim Breen as its CEO, succeeding Thomas Caulfield.
(This story has been corrected to say that Q4 revenue met estimates, not missed estimates of $1.98 billion, in paragraph 8)
(Reporting by Rishi Kant in Bengaluru; Editing by Tasim Zahid and Maju Samuel)
