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Eli Lilly (LLY) to Report Q2 Earnings: What's in Store?
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Eli Lilly and Company (LLY - Free Report) will report second-quarter 2019 results on Jul 30, before market open. In the last reported quarter, the company delivered a positive earnings surprise of 0.76%.
Lilly’s shares have declined 6.5% this year so far compared with the industry’s decline of 1.3%.
Lilly’s earnings performance has been mixed. Its earnings beat expectations in three of the last four quarters, with the average positive surprise being 3.63%.
Let’s see how things are shaping up for this announcement.
Factors to Consider
As in the previous couple of quarters, strong demand for new products like Trulicity, Basaglar, Jardiance, Taltz, Cyramza, Verzenio as well as new migraine drug, Emgality should make up for the decline in sales of established products like Cialis due to loss of exclusivity. Among the new drugs, in May, Cyramza gained FDA approval for second-line liver cancer, which expanded the drug’s eligible patient population. This may drive sales of the drug higher in the soon-to-be reported quarter.
Meanwhile, rising pricing pressure in the United States and some international markets, currency headwinds and the impact of the failed Lartruvo study are expected to put pressure on the top line in the second quarter.
Importantly, sales of advanced soft tissue sarcoma drug, Lartruvo is expected to decline sharply in the to-be-reported quarter as the company has suspended promotion of the medicine due to the failure of the ANNOUNCE confirmatory study.
The loss of exclusivity of Cialis, Effient, Strattera, Zyprexa, Cymbalta, Evista and Axiron in some countries will continue to hurt volumes. Lilly lost exclusivity for Cialis in September 2018 and generic versions entered the market in the same month resulting in rapid erosion of sales.
Also, competitive pressure and loss of exclusivity in certain countries are hurting Alimta sales, particularly international sales – a trend expected to continue in the second quarter.
Investors will be keen to know the sales numbers of Emgality, Lilly’s newly launched CGRP antibody, for the preventive treatment of migraine. Emgality generated U.S. revenues of $14.2 million in the first quarter. We expect sales to be much higher in the second quarter. Emgality was launched in some ex-U.S. markets in the first quarter of 2019. However, international sales contributed a meager $2.1 million in the first quarter. International sales of Emgality should be higher in the second quarter.
Moreover, Emgality was granted FDA approval for the preventive treatment of episodic cluster headache in adult patients. We expect management to update on the launch plans for the expanded indication on the second-quarter conference call.
Earnings Whispers
Our proven model does not conclusively show that Lilly will beat on earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here, as you will see below.
Earnings ESP: Its Earnings ESP is -0.51% as the Zacks Consensus Estimate of $1.47 is higher than the Most Accurate Estimate of $1.46. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Lilly’s Zacks Rank #3 increases the predictive power of ESP. However, we need to have a positive ESP to be confident about an earnings beat.
We caution against Sell-rated stocks (Zacks Rank #4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are some large drug/biotech stocks that have the right combination of elements to beat on earnings this time around:
Regeneron Pharmaceuticals, Inc. (REGN - Free Report) has an Earnings ESP of +6.25% and a Zacks Rank #3. The company is scheduled to release results on Aug 6.
Gilead Sciences (GILD - Free Report) has an Earnings ESP of +3.20% and a Zacks Rank #2. The company is scheduled to release results on Jul 30.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce ""the world's first trillionaires,"" but that should still leave plenty of money for regular investors who make the right trades early.
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Eli Lilly (LLY) to Report Q2 Earnings: What's in Store?
Eli Lilly and Company (LLY - Free Report) will report second-quarter 2019 results on Jul 30, before market open. In the last reported quarter, the company delivered a positive earnings surprise of 0.76%.
Lilly’s shares have declined 6.5% this year so far compared with the industry’s decline of 1.3%.
Lilly’s earnings performance has been mixed. Its earnings beat expectations in three of the last four quarters, with the average positive surprise being 3.63%.
Eli Lilly and Company Price and EPS Surprise
Eli Lilly and Company price-eps-surprise | Eli Lilly and Company Quote
Let’s see how things are shaping up for this announcement.
Factors to Consider
As in the previous couple of quarters, strong demand for new products like Trulicity, Basaglar, Jardiance, Taltz, Cyramza, Verzenio as well as new migraine drug, Emgality should make up for the decline in sales of established products like Cialis due to loss of exclusivity. Among the new drugs, in May, Cyramza gained FDA approval for second-line liver cancer, which expanded the drug’s eligible patient population. This may drive sales of the drug higher in the soon-to-be reported quarter.
Meanwhile, rising pricing pressure in the United States and some international markets, currency headwinds and the impact of the failed Lartruvo study are expected to put pressure on the top line in the second quarter.
Importantly, sales of advanced soft tissue sarcoma drug, Lartruvo is expected to decline sharply in the to-be-reported quarter as the company has suspended promotion of the medicine due to the failure of the ANNOUNCE confirmatory study.
The loss of exclusivity of Cialis, Effient, Strattera, Zyprexa, Cymbalta, Evista and Axiron in some countries will continue to hurt volumes. Lilly lost exclusivity for Cialis in September 2018 and generic versions entered the market in the same month resulting in rapid erosion of sales.
Also, competitive pressure and loss of exclusivity in certain countries are hurting Alimta sales, particularly international sales – a trend expected to continue in the second quarter.
Investors will be keen to know the sales numbers of Emgality, Lilly’s newly launched CGRP antibody, for the preventive treatment of migraine. Emgality generated U.S. revenues of $14.2 million in the first quarter. We expect sales to be much higher in the second quarter. Emgality was launched in some ex-U.S. markets in the first quarter of 2019. However, international sales contributed a meager $2.1 million in the first quarter. International sales of Emgality should be higher in the second quarter.
Moreover, Emgality was granted FDA approval for the preventive treatment of episodic cluster headache in adult patients. We expect management to update on the launch plans for the expanded indication on the second-quarter conference call.
Earnings Whispers
Our proven model does not conclusively show that Lilly will beat on earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here, as you will see below.
Earnings ESP: Its Earnings ESP is -0.51% as the Zacks Consensus Estimate of $1.47 is higher than the Most Accurate Estimate of $1.46. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Lilly’s Zacks Rank #3 increases the predictive power of ESP. However, we need to have a positive ESP to be confident about an earnings beat.
We caution against Sell-rated stocks (Zacks Rank #4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are some large drug/biotech stocks that have the right combination of elements to beat on earnings this time around:
AbbVie (ABBV - Free Report) has an Earnings ESP of +0.12% and a Zacks Rank #2. The company is slated to release results on Jul 26. You can see the complete list of today’s Zacks #1 Rank stocks here.
Regeneron Pharmaceuticals, Inc. (REGN - Free Report) has an Earnings ESP of +6.25% and a Zacks Rank #3. The company is scheduled to release results on Aug 6.
Gilead Sciences (GILD - Free Report) has an Earnings ESP of +3.20% and a Zacks Rank #2. The company is scheduled to release results on Jul 30.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce ""the world's first trillionaires,"" but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>