ISTANBUL

Shares of China’s largest contract chipmaker, Semiconductor Manufacturing International Corporation (SMIC), dropped more than 5% on Friday after the firm’s latest financial results missed market expectations.

SMIC posted a first-quarter revenue of $2.24 billion, marking a 28% year-on-year increase. Profit attributable to shareholders surged 162% to $188 million, the company said in its earnings release Thursday.

Despite the growth, both revenue and profit fell short of analysts’ estimates and the company’s internal guidance, prompting a decline in its stock as of 0730GMT.

For the second quarter, SMIC forecast a sequential revenue decline of 4% to 6% and a drop in gross margin from 22.5% to a range of 18% to 20%.

Still, the company noted robust operational metrics: wafer shipments rose 15% quarter-on-quarter and 28% year-on-year, while capacity utilization improved to 89.6%, up 4.1 points from the previous quarter.

SMIC attributed the increased shipments to changes in geopolitical conditions and government-driven demand boosts, including consumer subsidies and trade-in programs.