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Eli Lilly: 9% Revenue Growth in Q2 2018 Exceeded Estimates

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Eli Lilly’s revenues

Eli Lilly & Co. (LLY) reported 9.0% growth in its YoY (year-over-year) revenues to ~$6.4 billion during the second quarter, compared to $5.8 billion during the second quarter of 2017. Eli Lilly surpassed Wall Street analysts’ EPS and revenue estimates during the second quarter. On July 24, Eli Lilly reported non-GAAP EPS of $1.50 on revenues of ~$6.4 billion, compared to its estimated EPS of $1.30 on revenues of $6.0 billion during the quarter. 

In this series, we’ll take a detailed look at Eli Lilly’s second-quarter results. The chart below compares the company’s revenues since the first quarter of 2017.

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Q2 2018 performance

Eli Lilly’s (LLY) top line increased 9.0% to ~$6.36 billion during the second quarter, driven by 7.0% volume growth and a 2.0% favorable impact of foreign exchange during the quarter. Eli Lilly’s net adjusted income increased ~33.0% to ~$2.9 billion during the second quarter, compared to the second quarter of 2017.

Geographical performance

The US markets contributed ~50.7% to Eli Lilly’s total revenues during the second quarter. The company’s sales in the US markets reported YoY growth of 11.0% to ~$3.2 billion during the second quarter, compared to the second quarter of 2017.

In the international markets, the company reported YoY growth of 10.0% in sales to ~$2.8 billion during the second quarter, compared to the second quarter of 2017.

Updates for 2018 guidance

Eli Lilly (LLY) updated its financial guidance for 2018. It expects its revenues to reach $24.0 billion–$24.5 billion during 2018, driven by a favorable portfolio and higher collaboration revenues. 

The company’s non-GAAP gross profit margin is expected to increase to ~76.0% due to the favorable impact of foreign exchange. Its non-GAAP EPS is expected to reach $5.40–$5.50 for fiscal 2018, compared to its previous guidance of $5.10–$5.20.

The VanEck Vectors Morningstar Wide Moat ETF (MOAT) holds 2.9% of its total investments in Eli Lilly (LLY), 2.8% in Biogen (BIIB), 2.7% in Allergan (AGN), and 2.7% in Merck & Co. (MRK).

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