Eli Lilly & Company
) is scheduled to announce its fourth quarter and full year 2011
results on January 31, 2012 before the start of trading. The Zacks
Consensus Estimate for the fourth quarter is $0.80 (year-over-year
decrease of 27.9%) on revenues of $5,920 million (year-over-year
decrease of 4.3%).
For fiscal 2011, the Zacks Consensus Estimate is $4.35
(year-over-year decrease of 8.2%) on revenues of $24,146 million
(year-over-year increase of 4.6%). The Zacks Consensus Estimate for
2011 is at the highest end of the guidance range of $4.30-$4.35 per
share provided by the company.
Third Quarter Recap
Eli Lilly reported third quarter 2011 adjusted earnings per
share of $1.13, in line with the Zacks Consensus Estimate but 7%
below the year-ago earnings of $1.21. Earnings in the quarter were
hurt by higher operating expenses, which offset the rise in
Third quarter revenues increased 9% to $6.1 billion, just above
the Zacks Consensus Revenue Estimate of $6.0 billion. Revenues were
boosted by increased demand for Lilly's major products. Exchange
rates also favorably impacted revenues during the quarter. Reported
earnings (including special items), declined 6% to $1.11. Reported
earnings included $25.2 million of restructuring costs.
(Read our full coverage on this earnings report:
Earnings Decline at Eli Lilly
Agreement of Estimate Revisions
The analysts project an optimistic sentiment on Eli Lilly's
to-be-reported quarter. Out of the 13 analysts covering the stock
for the fourth quarter, 5 have revised their estimates upwards,
while 1 has moved in the opposite direction over the last 30 days.
Fiscal 2011 estimates too have witnessed an upward bias over the
last 30 days with 6 analysts raising estimates and 1 trimming the
However, fiscal 2012 estimates have witnessed a significant
downward trend over the last 30 days. 14 analysts have slashed
their 2012 earnings estimates with a sole upward movement. We
believe that the downward bias is attributable to the disappointing
2012 guidance issued by the company earlier this month. The
lackluster guidance was primarily attributable to the loss of
exclusivity of the blockbuster Zyprexa (a treatment for
schizophrenia and bipolar disorder) in the EU and US in late
Sales of Zyprexa are expected to erode by more than $3 billion
in 2012. The product, which posted $5.03 billion in sales in 2010,
generated more than $3.8 billion in sales in the first nine months
The loss of exclusivity of Zyprexa reflects the tough times
ahead for the company. Like several pharma companies including
), also reporting on January 31, Eli Lilly is facing or will be
facing generic competition for blockbuster drugs in its
About eight products, representing 74% of 2010 total revenues,
have lost or are expected to lose exclusivity over the next few
years at Eli Lilly. 2013 will see anti-depressant Cymbalta, another
blockbuster drug in Eli Lilly's portfolio, losing patent
protection. Osteoporosis drug Evista is expected to lose
exclusivity in 2014.
Magnitude of Estimate Revisions
Estimates for the fourth quarter as well as for fiscal 2011 have
gone up by a cent each over the last 30 days. Estimates for fiscal
2012 have gone down by 41 cents to $3.17 per share due to the
significant downward revisions over the last 30 days.
Eli Lilly has surpassed earnings estimates in two of the last
four quarters, missing estimates by a whisker in the second quarter
and reporting in-line earnings in the third quarter of 2011. On
average, the earnings surprise was 2.02%.
We currently have a Neutral recommendation on Eli Lilly, which
carries a Zacks #3 Rank (short-term Hold rating).
LILLY ELI & CO (
): Free Stock Analysis Report
PFIZER INC (
): Free Stock Analysis Report
To read this article on Zacks.com click here.