News

Eli Lilly & Co. Reports Surprise Q3 Profit but Slashes Full-Year Outlook

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4.6

Andrew R. Michaud

• November 02, 2023

Shares of Eli Lilly & Co. experienced a 1.8% drop in premarket trading on Thursday following the company's surprising third-quarter profit announcement, which was overshadowed by a reduced full-year outlook. The decline in outlook was primarily attributed to acquired in-process research and development charges.

Financial Performance

In the year-ago period, Eli Lilly & Co. recorded net income of $1.45 billion, or $1.61 per share. However, the company swung to a net loss of $57.4 million, or 6 cents per share, for the current quarter. Nevertheless, after excluding nonrecurring items, adjusted earnings per share amounted to 10 cents, surpassing the FactSet consensus of an estimated 18 cents loss.

Furthermore, the company's revenue witnessed a significant increase of 37% to $9.50 billion, exceeding the FactSet consensus of $9.00 billion. This revenue surge can be attributed to a 31% volume increase and a 6% rise in prices. Notably, the sale of rights for the olanzapine portfolio (Zyprexa), as well as growth from various drugs such as Jardiance, Trulicity, Verzenio, Mounjaro, and Taltz, contributed an additional $1.42 billion in volume, effectively compensating for the absence of COVID-19 revenue.

Revised Full-Year Outlook

Due to the impact of recent acquisitions, Eli Lilly & Co. revised its adjusted EPS guidance range for 2023. The new range stands at $6.50 to $6.70, compared to the previous guidance range of $9.70 to $9.90. The increase in guidance for acquired in-process research and development expenses amounts to $2.98 billion.

Market Performance

While the company faced a downward revision in its full-year outlook, the stock has still managed to rally impressively. Over the past three months, shares of Eli Lilly & Co. have experienced a 22% increase, outperforming the broader market. In comparison, the S&P 500 has declined by 6.1% during the same period.