(Reuters) - GlobalFoundries ( GFS ) marginally beat Wall Street expectations for second quarter revenue on Tuesday but forecast third-quarter adjusted profit below expectations, indicating a slower-than-anticipated recovery in chip demand.

The contract chipmaker reported a 11.5% decline in net revenue for the second-quarter as inventory levels at its customers in the Home and Industrial Internet of Things (IoT), smart mobile devices, and communications infrastructure & data center segments remained high.

Semiconductor clients are trying to work through existing chip inventory which they had built up during the pandemic to avoid a supply shortages.

Adding to the industry's woes, economic uncertainty has led enterprises to reduce spending.

The Malta, New York-based company expects adjusted net income per share in a range of 28 cents to 38 per share, the midpoint of which is below the average analysts' estimate of 35 cents per share, according to LSEG data.

The company forecast third-quarter revenue between $1.70 billion and $1.75 billion, slightly above estimates of $1.72 billion.

Smartphone and mobile device revenue fell by around 3% from a year ago while industrial IOT revenue declined 28%.

Revenue for the second quarter came in at $1.63 billion compared with estimates of $1.62 billion.

The company reported net income per share of 28 cents, compared with 43 cents per share, a year ago.