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Eli Lilly (LLY) Q2 Earnings Miss, Sales Beat, Stock Down
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Eli Lilly & Company (LLY - Free Report) reported second-quarter 2021 adjusted earnings per share of $1.87, which missed the Zacks Consensus Estimate of $1.89. Earnings however rose 29% year over year driven by higher operating profits.
Revenues of $6.74 billion beat the Zacks Consensus Estimate of $6.57 billion. Sales increased 23% year over year as volume increases and currency tailwinds offset the impact of lower realized prices of several of its drugs.
The second quarter of 2021 faced easier comparisons from the year-ago quarter as the reversal of $250 million COVID-related stocking benefit from the first quarter as well as business disruption from COVID-19 had hurt revenues in the second quarter of 2020. Second-quarter 2021 revenues also benefited from $170.0 million of revenues associated with the sale of its rights to Cialis in China.
Quarter in Detail
Lower realized prices had a negative impact of 2% on sales. Volumes rose 22%. Foreign exchange had a positive impact of 3% on revenue growth in the quarter.
Key growth products (products launched since 2014) drove 17% of revenue growth and represented nearly 54% total revenues, excluding revenues from COVID-19 antibodies. U.S. revenues climbed 18% to $3.70 billion while ex-U.S. revenues increased 29% to $3.04 billion.
Among the growth products, Trulicity generated revenues worth $1.54 billion, up 25% year over year driven by higher volumes, which offset decline in prices.
Cyramza revenues of $268.7 million were up 5% year over year driven by increased volumes.
Jardiance sales rose 36% to $356.5 million driven by increased demand trends within the SGLT2 class of diabetes medicines in the United States and increased volume outside the United States.
Basaglar recorded revenues of $210.7 million, down 27% year over year due to lower realized prices and weak demand caused by competitive pressure in the United States. Basaglar sales also rose in international markets.
Taltz brought in sales of $569.1 million, up 44% year over year as U.S. sales benefited from increased demand,which offset the impact of lower realized prices driven by increased rebates to gain broad commercial access. Ex-U.S. sales rose driven by increased volume.
Olumiant generated sales of $208.4 million in the quarter, up 44% year over year backed by increased volume and currency tailwinds in international markets. Lilly markets Olumiant in partnership with Incyte (INCY - Free Report) .
Verzenio generated sales of $341.3 million in the reported quarter, up 64% year over year, driven by increased demand and to some extent, higher realized prices.
Emgality generated revenues of $156.3 million in the quarter, up 79% year over year driven by increased demand and higher realized prices in the United States.
Tyvyt revenuesin China were $105.0 million, up 64% year over year. Lilly markets Tyvyt in partnership with Innovent.
Among the newer drugs, Retevmo generated sales of $25.7 million in the quarter compared with $16.8 million in the previous quarter.
Among the established products, Forteo sales declined 14% to $218.4 million. Humalog sales rose 9% to $607.6 million. Humulin sales rose 1% to $315.3 million. Alimta sales rose 13% to $610.6 million.
Lilly generated revenues of $148.9 million from its COVID-19 therapies, bamlanivimab and bamlanivimab/etesevimab cocktail medicine in the quarter, compared with $810.1 million recorded in the previous quarter,due to lower demand amid rising vaccinations. In April, Lilly requested the FDA to revoke the Emergency Use Authorization (EUA) granted to 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. Meanwhile, additional phase III studies are ongoing for the cocktail therapy and bamlanivimab is also being evaluated in combination with Glaxo (GSK - Free Report) /Vir Biotech’s (VIR - Free Report) VIR-7831.
Adjusted gross margin was 79.3% in the quarter, down 30 basis points. Operating income rose 29% year over year to $1.98 billion.
2021 Sales Guidance Narrowed
Lilly tightened its previously issued sales forecast for 2021 due to lower-than-expected demand for its COVID-19 antibody medicines. The company maintained its earnings guidance range for 2021.
Lilly expects adjusted earnings in the range of $7.80-$8.00 per share in 2021,which indicatesgrowth in the range of 15%-18%. The Zacks Consensus Estimate stands at $7.86 per share.
Revenues in 2021 are expected in the range of $26.8 billion-$27.4 billion, compared with $26.6 billion-$27.6 billion expected previously. The Zacks Consensus Estimate stands at $27.13 billion.
Lilly expects revenues in the range of $1.0-$1.1 billion from COVID-19 therapies compared with the prior range of $1.0-$1.5 billion.
Gross margin is expected to be approximately 79% (maintained). Adjusted tax rate is expected to be approximately 13% (maintained). Adjusted operating margin is expected to be 30% (previously 31%) in 2021.
Marketing, selling and administrative expense are expected to be in the range of $6.2 billion to $6.4 billion (maintained). Research and development expense is expected to be in the range of $6.9 billion to $7.1 billion (maintained).
Our Take
Lilly’s second-quarter results were mixed as it missed estimates for earningsbut beat the same for sales. Sales improved sequentially from the first quarter,which suggests a recovery from the impact of the pandemic as revenues from all key products grew in the quarter. However, lower revenues from Lilly’s COVID-19 antibody sales due to weak demand hurt sales in the quarter.
Shares were down around 2.8% in pre-market trading on Tuesday. Lilly’s stock has risen 46% this year so far compared with an increase of 12% for the industry.
Image Source: Zacks Investment Research
Lilly made significant pipeline progress in the quarter, as it announced plans to submit regulatory applications seeking approval of donanemab in Alzheimer's and tirzepatide in type II diabetes later this year.
Image: Bigstock
Eli Lilly (LLY) Q2 Earnings Miss, Sales Beat, Stock Down
Eli Lilly & Company (LLY - Free Report) reported second-quarter 2021 adjusted earnings per share of $1.87, which missed the Zacks Consensus Estimate of $1.89. Earnings however rose 29% year over year driven by higher operating profits.
Revenues of $6.74 billion beat the Zacks Consensus Estimate of $6.57 billion. Sales increased 23% year over year as volume increases and currency tailwinds offset the impact of lower realized prices of several of its drugs.
The second quarter of 2021 faced easier comparisons from the year-ago quarter as the reversal of $250 million COVID-related stocking benefit from the first quarter as well as business disruption from COVID-19 had hurt revenues in the second quarter of 2020. Second-quarter 2021 revenues also benefited from $170.0 million of revenues associated with the sale of its rights to Cialis in China.
Quarter in Detail
Lower realized prices had a negative impact of 2% on sales. Volumes rose 22%. Foreign exchange had a positive impact of 3% on revenue growth in the quarter.
Key growth products (products launched since 2014) drove 17% of revenue growth and represented nearly 54% total revenues, excluding revenues from COVID-19 antibodies. U.S. revenues climbed 18% to $3.70 billion while ex-U.S. revenues increased 29% to $3.04 billion.
Among the growth products, Trulicity generated revenues worth $1.54 billion, up 25% year over year driven by higher volumes, which offset decline in prices.
Cyramza revenues of $268.7 million were up 5% year over year driven by increased volumes.
Jardiance sales rose 36% to $356.5 million driven by increased demand trends within the SGLT2 class of diabetes medicines in the United States and increased volume outside the United States.
Basaglar recorded revenues of $210.7 million, down 27% year over year due to lower realized prices and weak demand caused by competitive pressure in the United States. Basaglar sales also rose in international markets.
Taltz brought in sales of $569.1 million, up 44% year over year as U.S. sales benefited from increased demand,which offset the impact of lower realized prices driven by increased rebates to gain broad commercial access. Ex-U.S. sales rose driven by increased volume.
Olumiant generated sales of $208.4 million in the quarter, up 44% year over year backed by increased volume and currency tailwinds in international markets. Lilly markets Olumiant in partnership with Incyte (INCY - Free Report) .
Verzenio generated sales of $341.3 million in the reported quarter, up 64% year over year, driven by increased demand and to some extent, higher realized prices.
Emgality generated revenues of $156.3 million in the quarter, up 79% year over year driven by increased demand and higher realized prices in the United States.
Tyvyt revenuesin China were $105.0 million, up 64% year over year. Lilly markets Tyvyt in partnership with Innovent.
Among the newer drugs, Retevmo generated sales of $25.7 million in the quarter compared with $16.8 million in the previous quarter.
Among the established products, Forteo sales declined 14% to $218.4 million. Humalog sales rose 9% to $607.6 million. Humulin sales rose 1% to $315.3 million. Alimta sales rose 13% to $610.6 million.
Lilly generated revenues of $148.9 million from its COVID-19 therapies, bamlanivimab and bamlanivimab/etesevimab cocktail medicine in the quarter, compared with $810.1 million recorded in the previous quarter,due to lower demand amid rising vaccinations. In April, Lilly requested the FDA to revoke the Emergency Use Authorization (EUA) granted to 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. Meanwhile, additional phase III studies are ongoing for the cocktail therapy and bamlanivimab is also being evaluated in combination with Glaxo (GSK - Free Report) /Vir Biotech’s (VIR - Free Report) VIR-7831.
Adjusted gross margin was 79.3% in the quarter, down 30 basis points. Operating income rose 29% year over year to $1.98 billion.
2021 Sales Guidance Narrowed
Lilly tightened its previously issued sales forecast for 2021 due to lower-than-expected demand for its COVID-19 antibody medicines. The company maintained its earnings guidance range for 2021.
Lilly expects adjusted earnings in the range of $7.80-$8.00 per share in 2021,which indicatesgrowth in the range of 15%-18%. The Zacks Consensus Estimate stands at $7.86 per share.
Revenues in 2021 are expected in the range of $26.8 billion-$27.4 billion, compared with $26.6 billion-$27.6 billion expected previously. The Zacks Consensus Estimate stands at $27.13 billion.
Lilly expects revenues in the range of $1.0-$1.1 billion from COVID-19 therapies compared with the prior range of $1.0-$1.5 billion.
Gross margin is expected to be approximately 79% (maintained). Adjusted tax rate is expected to be approximately 13% (maintained). Adjusted operating margin is expected to be 30% (previously 31%) in 2021.
Marketing, selling and administrative expense are expected to be in the range of $6.2 billion to $6.4 billion (maintained). Research and development expense is expected to be in the range of $6.9 billion to $7.1 billion (maintained).
Our Take
Lilly’s second-quarter results were mixed as it missed estimates for earningsbut beat the same for sales. Sales improved sequentially from the first quarter,which suggests a recovery from the impact of the pandemic as revenues from all key products grew in the quarter. However, lower revenues from Lilly’s COVID-19 antibody sales due to weak demand hurt sales in the quarter.
Shares were down around 2.8% in pre-market trading on Tuesday. Lilly’s stock has risen 46% this year so far compared with an increase of 12% for the industry.
Image Source: Zacks Investment Research
Lilly made significant pipeline progress in the quarter, as it announced plans to submit regulatory applications seeking approval of donanemab in Alzheimer's and tirzepatide in type II diabetes later this year.
Lilly currently has a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Eli Lilly and Company Price, Consensus and EPS Surprise
Eli Lilly and Company price-consensus-eps-surprise-chart | Eli Lilly and Company Quote