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What Analysts Project for Eli Lilly in 3Q17

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A look at Eli Lilly’s 3Q17 forecasts

Eli Lilly (LLY) is set to release its 3Q17 earnings on October 24, 2017. The company surpassed Wall Street analysts’ estimates for revenues and reported revenues of $5.8 billion for 2Q17 as compared to the estimates of $5.6 billion. The company also surpassed analysts’ EPS estimates and reported EPS of $1.11 per share against the estimates $1.05.

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Analysts’ estimates

For 3Q17, analysts estimate that Eli Lilly will post EPS of $1.03 on revenues of $5.52 billion. The top line is estimated to rise 6.4% to $5.5 billion in 3Q17, mainly due to the increased demand for products like Basaglar, Cyramza, Effient, Forteo, Humulin, Jardiance, Trulicity, and Taltz.

The US markets contribute around 55% of the company’s total revenues, while the international markets contribute around 45% of total revenues for Eli Lilly, which makes the company largely exposed to foreign exchange risks. Analysts expect revenue growth to be negatively affected by foreign exchange during 3Q17.

Profitability estimates

Analysts estimate the gross profit margin will be 75.2% for 3Q17, a 1.2% decrease as compared to the gross profit margin of 3Q16. Also, due to lower R&D expenses, and lower selling, general, and administrative expenses as a percentage of total revenues, the EBITDA margin is expected to increase to 29.2% in 3Q17 as compared to 26.6% in 3Q16. The net adjusted income is expected to increase to ~$1.08 billion in 3Q17.

Notably, the Health Care Select Sector SPDR ETF (XLV) holds 2.5% of its total assets in Eli Lilly. XLV also holds 3.2% in Bristol-Myers Squibb (BMY), 3.5% in Gilead Sciences (GILD), and 5.6% in Merck (MRK).

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