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Eli Lilly (LLY) to Report Q2 Earnings: What's in the Cards?
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Eli Lilly & Company (LLY - Free Report) will report second-quarter 2021 results on Aug 3, before market open. In the last reported quarter, the company delivered a negative earnings surprise of 11.79%.
This large drugmaker’s performance has been mixed, with earnings beating in two of the trailing four quarters while missing in the other two. The company delivered a four-quarter earnings surprise of 3.09%, on average.
Eli Lilly and Company Price, Consensus and EPS Surprise
Lilly’s stock has risen 45.3% this year so far compared with an increase of 12.5% for the industry.
Image Source: Zacks Investment Research
Factors to Consider
The second quarter of 2021 will face easier comparisons from the year-ago quarter as revenues in the second quarter of 2020 were hurt by the reversal of $250 million COVID-related stocking benefit from the first quarter as well as an additional $250 million due to business disruption from COVID-19.
In the second quarter of 2021, higher demand and volume growth for its key drugs including Trulicity, Taltz, Verzenio, Jardiance, Olumiant, and Emgality are likely to have provided top-line support.
Sales of key drug Basaglar declined in the past three quarters due to lower realized prices and weak demand caused by competitive pressure in the United States. It remains to be seen if the sales trends improved in the second quarter.
In the first quarter, Taltz sales were hurt by lower realized prices driven by increased rebates to gain broad commercial access. However, Taltz sales are expected to have increased in the second quarter as volume growth from the major access upgrade must have outpaced the related pricing headwind.
The Zacks Consensus Estimate for sales of Basaglar and Taltz is pegged at $272 million and $489 million, respectively.
The Zacks Consensus Estimate for sales of Trulicity, Verzenio and Jardiance stands at $1.56 billion, $300 million and $339 million, respectively.
Generic competition for several drugs, rising pricing pressure in the United States due to increased rebates and price declines in some international markets like China, Japan and Europe are expected to have negatively impacted the top line in the second quarter of 2021.
Importantly, revenues from its COVID-19 drugs were lower than expected in the first quarter due to lower demand, which forced the company to lower its full-year sales and earnings guidance. In April, Lilly requested the FDA to revoke the Emergency Use Authorization (EUA) granted to its antibody medicine for COVID-19, bamlanivimab as a monotherapy. Lilly is now supplying its antibody cocktail, bamlanivimab and etesevimab together, which were granted emergency approval by the FDA in February. Investors will be keen to know the cocktail medicine’s sales numbers and whether they met the company’s expectations on the second-quarter earnings call.
Overall, second-quarter results of Lilly are likely to reflect continued negative impact from the pandemic though trends are expected to be better as economies have re-opened and vaccinations continue in full swing. However, the potential impact of an expected third wave of infections on their performance needs to be seen.
Earnings Whispers
Our proven model does not conclusively predict an earnings beat for Lilly this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that is not the case here.
Earnings ESP: Lilly’s Earnings ESP is 0.00% as the Zacks Consensus Estimate as well as the Most Accurate Estimate stand at $1.89 per share. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Lilly has a Zacks Rank #4 (Sell).
Stocks to Consider
Here are three large drug/biotech stocks that have the right combination of elements to beat on earnings this time around:
Moderna (MRNA - Free Report) has an Earnings ESP of +24.12% and a Zacks Rank #3.
Zoetis (ZTS - Free Report) has an Earnings ESP of +4.32% and a Zacks Rank #3.
Image: Shutterstock
Eli Lilly (LLY) to Report Q2 Earnings: What's in the Cards?
Eli Lilly & Company (LLY - Free Report) will report second-quarter 2021 results on Aug 3, before market open. In the last reported quarter, the company delivered a negative earnings surprise of 11.79%.
This large drugmaker’s performance has been mixed, with earnings beating in two of the trailing four quarters while missing in the other two. The company delivered a four-quarter earnings surprise of 3.09%, on average.
Eli Lilly and Company Price, Consensus and EPS Surprise
Eli Lilly and Company price-consensus-eps-surprise-chart | Eli Lilly and Company Quote
Lilly’s stock has risen 45.3% this year so far compared with an increase of 12.5% for the industry.
Image Source: Zacks Investment Research
Factors to Consider
The second quarter of 2021 will face easier comparisons from the year-ago quarter as revenues in the second quarter of 2020 were hurt by the reversal of $250 million COVID-related stocking benefit from the first quarter as well as an additional $250 million due to business disruption from COVID-19.
In the second quarter of 2021, higher demand and volume growth for its key drugs including Trulicity, Taltz, Verzenio, Jardiance, Olumiant, and Emgality are likely to have provided top-line support.
Sales of key drug Basaglar declined in the past three quarters due to lower realized prices and weak demand caused by competitive pressure in the United States. It remains to be seen if the sales trends improved in the second quarter.
In the first quarter, Taltz sales were hurt by lower realized prices driven by increased rebates to gain broad commercial access. However, Taltz sales are expected to have increased in the second quarter as volume growth from the major access upgrade must have outpaced the related pricing headwind.
The Zacks Consensus Estimate for sales of Basaglar and Taltz is pegged at $272 million and $489 million, respectively.
The Zacks Consensus Estimate for sales of Trulicity, Verzenio and Jardiance stands at $1.56 billion, $300 million and $339 million, respectively.
Generic competition for several drugs, rising pricing pressure in the United States due to increased rebates and price declines in some international markets like China, Japan and Europe are expected to have negatively impacted the top line in the second quarter of 2021.
Importantly, revenues from its COVID-19 drugs were lower than expected in the first quarter due to lower demand, which forced the company to lower its full-year sales and earnings guidance. In April, Lilly requested the FDA to revoke the Emergency Use Authorization (EUA) granted to its antibody medicine for COVID-19, bamlanivimab as a monotherapy. Lilly is now supplying its antibody cocktail, bamlanivimab and etesevimab together, which were granted emergency approval by the FDA in February. Investors will be keen to know the cocktail medicine’s sales numbers and whether they met the company’s expectations on the second-quarter earnings call.
Overall, second-quarter results of Lilly are likely to reflect continued negative impact from the pandemic though trends are expected to be better as economies have re-opened and vaccinations continue in full swing. However, the potential impact of an expected third wave of infections on their performance needs to be seen.
Earnings Whispers
Our proven model does not conclusively predict an earnings beat for Lilly this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that is not the case here.
Earnings ESP: Lilly’s Earnings ESP is 0.00% as the Zacks Consensus Estimate as well as the Most Accurate Estimate stand at $1.89 per share. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Lilly has a Zacks Rank #4 (Sell).
Stocks to Consider
Here are three large drug/biotech stocks that have the right combination of elements to beat on earnings this time around:
Moderna (MRNA - Free Report) has an Earnings ESP of +24.12% and a Zacks Rank #3.
Zoetis (ZTS - Free Report) has an Earnings ESP of +4.32% and a Zacks Rank #3.
Regeneron (REGN - Free Report) has an Earnings ESP of +12.64% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.