Eli Lilly Reconfirms 2010 Guidance

Eli Lilly forecasts 2010 earnings generally in line with consensus estimates as the company swings to a fourth-quarter profit.
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INDIANAPOLIS, Ind. (

TheStreet

) --

Eli Lilly

(LLY) - Get Report

forecasts earnings generally in line with consensus estimates as the company swung to a profit in the fourth quarter.

Eli Lilly reconfirmed financial guidance it originally provided at its investment meeting in December. Excluding the potential impact of health care reform in the U.S., the company expects 2010 earnings of $4.65 to $4.85 a share on both a reported and non-GAAP basis.

The consensus estimate of analysts surveyed by Thomson Reuters is $4.73 a share.

"In 2010, we are well-positioned, through our new operating structure and development center of excellence, to maximize the value of our portfolio of products worldwide and advance the promising medicines currently in our clinical pipeline," said Lilly CEO John Lechleiter, in a statement.

For 2010, Eli Lilly expects volume-driven revenue growth in the high-single digits, driven primarily by Alimta, Cymbalta, Humalog, Cialis, Effient and the exenatide franchise. The company anticipates that gross margin as a percentage of revenue will be flat to declining. Excluding the effect of foreign exchange rates on international inventories sold, the company expects gross margin as a percent of revenue to increase.

Meanwhile, marketing, selling and administrative expenses are projected to grow in the low to mid-single digits while research and development expenses are projected to grow in the low-double digits.

Other income is expected to be a net expense of between $150 and $200 million, and the tax rate is expected to be about 22%. Eli Lilly's cash flows are expected to be sufficient to fund capital expenditures of about $1 billion, anticipated business development activity and the company's dividend.

Eli Lilly reported fourth-quarter net income $915.4 million, or 83 cents per share, as revenue rose to $5.9 billion, compared with the previous year's net loss of $3.6 billion, or $3.31 a share, on revenue of $5.2 billion. On an adjusted basis, fourth-quarter earnings were 91 cents a share.

"Lilly's financial results in the fourth quarter completed a year of strong operational performance, highlighted by volume-based revenue gains, improved gross margins and quality earnings growth," Lechleiter said. "In 2009, we delivered solid financial results even as we continued to implement a series of actions aimed at speeding innovation to patients and delivering greater value to our customers."

A Thomson Reuters survey of analysts had fourth-quarter earnings at 92 cents a share and $5.68 billion in revenue.

-- Reported by Andrea Tse in New York

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