Elanco Animal Q3 Earnings: Profit Beat, New Products And Stabilized Business To Drive 2025 Sales

On Thursday, Elanco Animal Health Incorporated ELAN reported third-quarter revenue of $1.03 billion, a decrease of 4% on a reported basis or a 1% organic constant currency growth, in line with the consensus.

The animal health company reported adjusted EPS of $0.13, down 28% year over year, beating the consensus of $0.12.

Also Read: Elanco's Dermatology Treatment Secures FDA Approval For Itchy Dogs, Analyst Highlights Label Warnings And Efficacy

Pet Health revenue was $486 million, a decrease of 2% on a reported and constant currency basis, primarily driven by competitive pressure on certain products in the U.S. veterinary channel, competitive pressure in Australia, and supply volatility for vaccines in the U.S., partially offset by increased sales of new products and improved demand for retail parasiticide products in the U.S. and Europe.

Farm Animal revenue fell 6% (+3% on constant currency) to $530 million, driven by a 3% increase in price. Volumes were flat, primarily driven by strength in U.S. cattle, led by Experior and Rumensin, and poultry sales in the U.S. and Europe, offset by lower demand for sheep products in Australia and planned volume declines from the strategic decision to change go-to-market models in certain countries, as well as the European recall of Kexxtone.

Gross profit was $538 million, or a margin of 52.2%, with a 220-basis point decline driven by higher inflation, unfavorable manufacturing performance, and product mix associated with the divested aqua business, partially offset by increased pricing.

Guidance: Elanco tightened its financial guidance for the full year 2024.

The company expects 2024 sales of $4.42 billion-$4.45 billion versus prior guidance of $4.41 billion-$4.46 billion and consensus of $4.43 billion.

The company expects 2024 adjusted EPS of $0.89-$0.95, compared to previous guidance of $0.88-$0.96 and the consensus of $0.92. Elanco has lowered expectations for U.S. Pet Health parasiticides.

Elanco expects fourth-quarter sales of $1 billion—$1.03 billion and adjusted EPS of $0.13-$0.18, compared to the consensus of $1.034 billion and $0.12, respectively.

"We are encouraged by the acceleration of constant currency sales growth from 1% in 2023 to the expected 3% organic constant currency growth in 2024. We see this accelerating further to mid-single digits in 2025 with increased sales from new products and a stabilizing base driving expected growth in both pet health and farm animal," said Todd Young, CFO of Elanco.

Price Action: ELAN stock is up 13.10% at $14.55 at the last check on Thursday.

Read Next:

• Krispy Kreme Falters In Q3: Earnings Miss, Sales Slide, And Outlook Dims Post-Insomnia Cookies Sale

Image via Pexels