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GlobalFoundries Forecasts Stronger Q2 Amid Stable Demand and Tariff Tailwinds

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GlobalFoundries (GFS.O) on Tuesday projected second-quarter revenue and profit slightly above Wall Street expectations, indicating stable demand despite industry-wide pressures from tariffs, smartphone weakness, and policy uncertainty.

The U.S.-based contract chipmaker expects Q2 revenue of $1.68 billion (±$25 million) and adjusted earnings of 36 cents per share (±5 cents). Analysts polled by LSEG had anticipated $1.67 billion in revenue and 35 cents per share in profit. The positive forecast comes after the company posted Q1 revenue of $1.59 billion, slightly ahead of estimates, and adjusted earnings of 34 cents, beating forecasts of 28 cents.

While smartphone demand, its largest revenue stream, remains under pressure, GlobalFoundries said its automotive chip segment showed year-over-year growth in Q1. This resilience comes amid U.S. President Donald Trump’s global tariff strategy, which has already imposed levies on foreign-made autos – the company’s third-largest market.

Interestingly, CEO Thomas Caulfield noted that U.S. tariffs on foreign-made chips could benefit domestic manufacturers like GlobalFoundries by prompting customers to shift production to U.S.-based fabs. However, broader uncertainty around the CHIPS Act, which includes $52.7 billion in U.S. subsidies for domestic chip production, continues to cloud the industry’s long-term outlook.

Meanwhile, speculation of a potential merger with Taiwanese United Microelectronics Corp (UMC) resurfaced in March, although UMC denied any ongoing talks in April.

Despite the policy fog and shaky smartphone sector, GlobalFoundries appears cautiously optimistic heading into Q2 – signaling potential resilience among U.S.-based chipmakers navigating a turbulent geopolitical landscape.

Eli Lilly’s Q2 Earnings Surpass Expectations, Raises Full-Year Outlook

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Eli Lilly reported stellar second-quarter earnings, significantly exceeding market expectations, driven by robust sales of its diabetes drug Mounjaro and weight loss injection Zepbound. The pharmaceutical giant raised its full-year revenue forecast by $3 billion, now expecting between $45.4 billion and $46.6 billion, while also increasing its adjusted earnings guidance to a range of $16.10 to $16.60 per share.

The company’s performance was primarily bolstered by the increased demand for Mounjaro and Zepbound, which together have seen sales soar as supply constraints begin to ease. Despite previous shortages, Eli Lilly’s recent expansion in production capacity has improved the availability of these drugs in the U.S., contributing to the positive financial results. Zepbound, in its second full quarter on the U.S. market, generated $1.24 billion in sales, outperforming analyst expectations. Similarly, Mounjaro brought in $3.09 billion, more than triple the revenue from the same period last year.

CEO David Ricks noted that the company has ramped up its manufacturing efforts, including building six new plants and hiring thousands of workers to meet the growing demand. He also mentioned that Eli Lilly is working on developing more convenient weight loss pills to complement its existing injectable treatments.

Eli Lilly’s shares rose by more than 7% following the earnings announcement, continuing a strong upward trend that has seen the stock gain over 30% this year. The company’s market cap now exceeds $730 billion, making it the largest pharmaceutical firm based in the U.S. This success contrasts with competitor Novo Nordisk, which recently reported weaker-than-expected sales for its similar drugs due to pricing pressures.

 

Biogen Surpasses Q2 Expectations and Raises Outlook as Alzheimer’s Drug Leqembi and New Products Drive Growth

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Biogen reported second-quarter earnings and revenue that exceeded estimates, leading to an increase in the company’s full-year guidance. The improved outlook is attributed to the successful implementation of cost-cutting measures and stronger-than-expected sales of the Alzheimer’s drug Leqembi and other new products. Biogen now projects full-year adjusted earnings to be between $15.75 and $16.25 per share, up from the previous forecast of $15 to $16 per share.

Despite expecting a slight decline in 2024 sales, Biogen is optimistic about its growth prospects. Leqembi, developed in partnership with Eisai, has shown promising sales figures, generating approximately $40 million in Q2, surpassing the $31 million expected by analysts. This is a significant increase from the $10 million in sales reported last year. However, Leqembi faces regulatory challenges in Europe due to concerns about brain swelling and bleeding risks, which Biogen is currently addressing.

CEO Chris Viehbacher expressed confidence in the company’s new product launches, noting that all are performing in line with or ahead of expectations. Biogen aims to achieve $1 billion in gross cost savings by 2025, with $800 million in net savings. These savings will allow the company to reinvest in new product launches and essential research and development projects.

In addition to Leqembi, Biogen’s acquisition of Reata Pharmaceuticals has brought Skyclarys into its portfolio, which reported $100 million in Q2 sales, exceeding the $92.3 million anticipated by analysts. Skyclarys, approved by the FDA last year, is the first treatment for Friedreich’s ataxia. The company plans to market Skyclarys in 20 countries by the end of the year.

Zurzuvae, the first oral treatment for postpartum depression, also performed well, with Q2 sales of $14.9 million, beating the expected $11 million. However, Biogen’s multiple sclerosis treatments saw a 5% decline in sales, totaling $1.15 billion, due to competition from generics. Despite this, some treatments, like Tecfidera, managed to generate higher-than-expected revenue.