Eli Lilly Earnings Preview

Motley Fool Staff
Updated

While Eli Lilly (NYS: LLY) missed estimates last quarter, investors hope that it will bounce back and outpace Wall Street expectations this quarter. The company will unveil its latest earnings on Thursday, Oct. 20. Eli Lilly develops and manufactures pharmaceutical products as well as animal health products.

What analysts say:

  • Buy, sell, or hold?: Analysts think investors should stand pat on Eli Lilly with 12 of 17 analysts rating it hold. Analysts don't like Eli Lilly as much as competitor Bristol-Myers Squibb overall. Fourteen out of 25 analysts rate Bristol-Myers Squibb a buy compared to two of 17 for Eli Lilly. Analysts still rate the stock a moderate sell, but they are a bit more wary about it compared to three months ago.

  • Revenue forecasts: On average, analysts predict $6.03 billion in revenue this quarter. That would represent a rise of 6.7% from the year-ago quarter.

  • Wall Street earnings expectations: The average analyst estimate is earnings of $1.13 per share. Estimates range from $1.05 to $1.23.

What our community says:
CAPS All-Stars are solidly backing the stock with 95.4% giving it an "outperform" rating. The community at large concurs with the All-Stars with 93.5% awarding it a rating of "outperform." Fools are gung-ho about Eli Lilly and haven't been shy with their opinions lately, logging 411 posts in the past 30 days. Even with a robust four out of five stars, Eli Lilly's CAPS rating falls a little short of the community's upbeat outlook.

Management:
Eli Lilly's profit has risen year over year by an average of 9.9% over the past five quarters. Revenue has now gone up for three straight quarters.

Now let's look at how efficient management is at running the business. Traditionally, margins represent the efficiency with which companies capture portions of sales dollars. The following table shows gross, operating, and net margins over the past four quarters.

Quarter

Q2

Q1

Q4

Q3

Gross Margin

80.4%

79.8%

80.1%

82.5%

Operating Margin

25.4%

22.0%

23.4%

29.9%

Net Margin

19.1%

18.1%

18.9%

23.0%

For all our Eli Lilly-specific analysis, including earnings and beyond, add Eli Lilly to My Watchlist.

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At the time thisarticle was published

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