IBJNews

Lilly shares rise after drugmaker reports solid second quarter

Back to TopCommentsE-mailPrintBookmark and Share

Eli Lilly and Co. shares jumped 2.6 percent Wednesday morning after the drug maker reported better-than-expect results for the second quarter.

Strong sales and penny-pinching helped Lilly beat Wall Street’s expectations in the quarter, leading the company to raise its profit forecast for the year.

The Indianapolis-based drugmaker reported earnings of $1.2 billion in the three months ended June 30, an increase of 31 percent compared with same quarter last year. Earnings per share totaled $1.11, compared with 83 cents a year ago.

Excluding a restructuring charge of $63.5 million from the closing of a plant in Germany, Lilly would have earned $1.16 per share. On that basis, analysts were expecting earnings of $1 per share, according to a survey by Thomson Financial.

Because it outperformed those expectations, Lilly hiked up its profit expectations for the year by a range of 13 cent to 18 cents per share. The company now expects to earn between $4.28 and $4.38 for the year.

In the second quarter, Lilly was able to boost its sales 6 percent worldwide to $5.9 billion. Analysts were expecting revenue of $5.82 billion.

"Continued operating and financial discipline, along with a maturing pipeline of potential new medicines, gives me great confidence in the company's ability to meet the challenges we face from upcoming patent expirations and to resume growth after 2014,” Lilly CEO John Lechleiter said in a prepared statement.

Lechleiter took a leave of absence on May 13 to have surgery on a dilated aoarta. He returned on July 8.

 “It looks like they were doing some pretty good work while I was gone,” Lechleiter said.

Lilly’s bestselling drug, the antidepressant Cymbalta, is set to lose its U.S. patent protection in December, after which its sales will switch to cheaper generics. Sales of Cymbalta grew 22 percent in the second quarter, to nearly $1.5 billion.

Lilly already lost patent protection on its former bestseller, the antipsychotic Zyprexa, in late 2011. And Lilly also will lose patent protection on Evista, an osteoporosis drug, next year. Lilly is hoping to win approval on new diabetes and cancer drugs to offset those coming hits to its sales.

The company has cut costs to help fund its drive for new drugs, and last week said it would freeze wages for most of its workers.

“Management appears to be showing prudent cost discipline in anticipation of the Cymbalta patent cliff,” Mark Schoenebaum, an analyst with International Strategy & Investment Group in New York said in a report. “Smart expense control should increase the street’s confidence that Lilly is serious about dramatically improving operating margins post-2014.”

Lilly expects a 20-percent reduction in revenue in 2014 because of the U.S. expiration of the Cymbalta and Evista patents, a company spokesman said July 17. Lilly had hoped to avoid more cost cuts in the medium term, Lechleiter said.

“We’re losing a lot of revenue when at the same time we’ve got to launch our phase III products,” he said.

“You don’t take these actions lightly. This is the second such announcement in three years,” Lechleiter said of the wage freeze.
 

ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
ADVERTISEMENT

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
 
Subscribe to IBJ
  1. In reality, Lilly is maintaining profit by cutting costs such as Indiana/US citizen IT workers by a significant amount with their Tata Indian consulting connection, increasing Indian H1B's at Lillys Indiana locations significantly and offshoring to India high paying Indiana jobs to cut costs and increase profit at the expense of U.S. workers.

  2. I think perhaps there is legal precedence here in that the laws were intended for family farms, not pig processing plants on a huge scale. There has to be a way to squash this judges judgment and overrule her dumb judgement. Perhaps she should be required to live in one of those neighbors houses for a month next to the farm to see how she likes it. She is there to protect the people, not the corporations.

  3. http://www.omafra.gov.on.ca/english/engineer/facts/03-111.htm Corporate farms are not farms, they are indeed factories on a huge scale. The amount of waste and unhealthy smells are environmentally unsafe. If they want to do this, they should be forced to buy a boundary around their farm at a premium price to the homeowners and landowners that have to eat, sleep, and live in a cesspool of pig smells. Imagine living in a house that smells like a restroom all the time. Does the state really believe they should take the side of these corporate farms and not protect Indiana citizens. Perhaps justifiable they should force all the management of the farms to live on the farm itself and not live probably far away from there. Would be interesting to investigate the housing locations of those working at and managing the corporate farms.

  4. downtown in the same area as O'malia's. 350 E New York. Not sure that another one could survive. I agree a Target is needed d'town. Downtown Philly even had a 3 story Kmart for its downtown residents.

  5. Indy-area residents... most of you have no idea how AMAZING Aurelio's is. South of Chicago was a cool pizza place... but it pales in comparison to the heavenly thin crust Aurelio's pizza. Their deep dish is pretty good too. My waistline is expanding just thinking about this!

ADVERTISEMENT