Earnings Preview: Eli Lilly

Apr.24.12 | About: Eli Lilly (LLY)

Eli Lilly (NYSE:LLY) is expected to report Q1 earnings before the open on Wednesday, April 25, with a conference call scheduled for 9:00 am ET.


Analysts are looking for a profit of 78c on revenue of $5.36B. The consensus range is 67c-84c for EPS on revenue of $5.06B-$5.51B, according to First Call. On its last earnings call, the company affirmed its FY12 EPS view of $3.10-$3.20 and its full year revenue guidance of $21.8B-$22.8B. At that time, Eli Lilly reported its Q4 gross margin fell to 78.1% on lower sales of Zyprexa but said it sees its FY12 gross margin at 77% of revenue and expects to keep operating expenses essentially flat this year. Investors will be interested to see if the company has made progress toward those targets during the first part of the year and will be eager for an update on the company's pipeline, particularly its Alzheimer's treatment candidate, solanezumab. Eli Lilly's CEO recently said that the company needs to rely on new medicines, not cost-cutting, to overcome the revenue lost from the patent expirations of two of its main drugs.

Analyst Views

In March, JP Morgan upgraded Eli Lilly's stock to to Neutral from Underweight, citing upcoming pipeline clarity, while MKM Partners had previously upgraded shares to Neutral from a Sell rating. Shares are virtually unchanged in afternoon trading, while the Healthcare sector of the S&P is higher by 0.36%.