Eli Lilly's Q1 EPS Disappoints

Eli Lilly and Co LLY reported 17 percent drop in its net income to $440.1 million from $529.5 million in the previous year quarter. Its earnings also fell 18 percent to $0.41 a share from $0.50 a share in the prior year quarter.

On an adjusted basis also, its net income fell 4 percent to $882.3 million from $923.7 million while earnings dipped 5 percent to $0.83 a share from $0.87 a share in the prior year period. This was lower by $0.02 per share from the analysts' expectations of $0.85 a share.

The company blamed the drop in net income and EPS to the charge related to the impact of the Venezuelan financial crisis. That included the significant deterioration of the bolívar, and higher income taxes, partly offset by higher operating income.

However, Eli Lilly's revenue advanced 4.75 percent to $4.865 billion from $4.644 billion in the year-ago quarter. This was slightly above the Street predictions of $4.82 billion.

The company's Chairman, President and CEO, John Lechleiter, said "Revenue growth in the first quarter reflects substantial progress in launching new products, including Trulicity, Cyramza, Jardiance, Basaglar and Portrazza. In addition, we recently launched Taltz in the U.S., following its FDA approval last month. Several other potential products are currently under regulatory review, including olaratumab and baricitinib. Clearly, our innovation strategy is paying off, for the benefit of patients as well as shareholders."

Moving ahead, Eli Lilly said it expects earnings to be $2.68-$2.78 a share for the full year. Similarly, the company sees adjusted EPS to be $3.50-$3.60. The mid-point of $3.55 a share is higher than the Street expectations of $3.54 a share.