Analyst Estimates for Eli Lilly’s 1Q17 Earnings
A look at Eli Lilly
Eli Lilly and Company (commonly referred to as “Lilly”) (LLY) is a US pharmaceutical company headquartered in Indianapolis, Indiana. The company deals with both human pharmaceuticals and animal health.
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Lilly is set to release its 1Q17 earnings on April 25, 2017. Its 4Q16 revenues surpassed Wall Street analysts’ estimates, and revenues came in at ~$5.8 billion against estimated revenues of ~$5.6 billion.
Analysts are estimating Lilly’s EPS (earnings per share) at $0.96 and revenues of $5.2 billion for 1Q17.
Analysts are also estimating that Lilly’s top line will rise ~7.1% to $5.2 billion in 1Q17. The rise in revenues will be due mainly to a strong performance from products such as Erbitux, Cyramza, Trulicity, Humalog, and some new products.
The inclusion of revenues from Novartis (NVS) Animal Health products will also contribute to Lilly’s revenue growth. However, growth will be impacted by the negative impact of foreign exchange. About 50.0% of Lilly’s total revenues are generated outside the United States.
Analyst estimates show Lilly’s gross profit margin at 76.5% for 1Q17. That’s a 0.20% rise from its gross profit margin for 1Q16. Also, because of lower R&D (research and development) expenses and lower SG&A (selling, general, and administrative) expenses as a percentage of total revenues, Lilly’s EBITDA (earnings before interest, tax, depreciation, and amortization) margin is expected to rise to 30.6% in 1Q17. Its EBITDA was 25.3% in 1Q16. Net adjusted income is expected to rise to ~$1.0 billion in 1Q17.
To divest the company-specific risks, you could consider ETFs such as the SPDR S&P Pharmaceuticals ETF (XPH). XPH holds 5.0% of its total assets in Eli Lilly (LLY), 4.6% in Johnson & Johnson (JNJ), 4.5% in Pfizer (PFE), and 5.1% in Allergan (AGN).