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Lilly Q1 Profit Down; Cuts FY Profit View

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Eli Lilly and Co. (LLY) reported a profit for the first quarter of 2021 that declined 7 percent from last year, hurt by lower operating income, partially offset by higher other income and lower income tax expense. But quarterly revenue increased 16 percent. The company reported worldwide revenue of $810.1 million in the latest-quarter for its COVID-19 antibodies.

In Tuesday pre-market trade, LLY was trading at $180.49 down $6.73 or 3.59 percent.

The company lowered its fiscal year 2021 earnings per share guidance to a range of $7.03 to $7.23 from the prior estimation of $7.10 to $7.75.

The company now projects annual non-GAAP earnings per share to be in the range of $7.80 to $8.00 compared to the previous outlook of $7.75 to $8.40. Analysts expect annual earnings of $8.32 per share.

The company now anticipates 2021 revenue to be between $26.6 billion and $27.6 billion, including an estimated $1 billion to $1.5 billion of revenue from COVID-19 therapies. Analysts expect annual revenues of $27.69 billion. The company previously expected annual revenue to be between $26.5 billion and $28.0 billion.

The company's first-quarter net income declined to $1.36 billion or $1.49 per share from $1.46 billion or $1.60 per share in the previous year.

Operating income for the first quarter also declined to $1.16 billion, from $1.59 billion in the previous year. The decrease in operating income was primarily driven by higher research and development expenses, higher acquired in-process research and development charges, and higher asset impairment, restructuring and other special charges, partially offset by higher gross margin.

Other income was $321.1 million in the first quarter of 2021, compared with other income of $89.1 million in the first quarter of 2020. The increase in other income was driven primarily by higher net gains on investment securities.

On a non-GAAP basis, net income was $1.70 billion or $1.87 per share compared to $1.47 billion or $1.61 per share in the previous year. Analysts polled by Thomson Reuters expected the company to report earnings of $2.14 per share for the quarter. Analysts' estimates typically exclude special items.

Worldwide revenue for the first-quarter was $6.81 billion, an increase of 16 percent from $5.86 billion last year, driven by a 17 percent increase in volume and a 3 percent increase due to the favorable impact of foreign exchange rates, partially offset by a 4 percent decrease due to lower realized prices. Analysts expected revenues of $7.02 billion for the first-quarter.

Key growth products, consisting of Trulicity, Verzenio, Olumiant, Tyvyt, Emgality, Jardiance, Retevmo, Cyramza and Taltz, contributed 8 percentage points of revenue growth and represented approximately 46 percent of total revenue for the first quarter of 2021 or 52 percent of total revenue excluding revenue from COVID-19 antibodies.

Excluding $810.1 million of revenue in the first quarter of 2021 from COVID-19 antibodies and approximately $250 million of revenue in the first quarter of 2020 from increased customer buying patterns and patient prescription trends, worldwide revenue in the first quarter of 2021 grew by 7 percent.

Revenue in the U.S. increased 18 percent, to $3.941 billion, driven by a 24 percent increase in volume, partially offset by a 6 percent decrease due to lower realized prices.

Revenue outside the U.S. increased 13 percent, to $2.864 billion, driven by a 9 percent increase in volume and a 6 percent increase due to the favorable impact of foreign exchange rates, partially offset by a 2 percent decrease due to lower realized prices.

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