Eli Lilly ( LLY), the big drug maker, announced today that its second quarter earnings grew 20%, besting Wall Street targets, and offered an improved profit outlook for the year.

Before the bell Wednesday, the Indianapolis company posted net income of $1.16 billion, up from the year-ago period's $960 million. On a per-share basis, that came out to $1.06 compared with 88 cents a year ago. A survey of analysts had a median target of $1.02 a share.

During the quarter, Lilly set aside $105 million in case it must settle several pending lawsuits related to the company's top-selling drug, Zyprexa, an anti-psychotic. Removing that sum, the company said its adjusted earnings for the quarter came to $1.12 a share.

Second-quarter revenue, meanwhile, amounted to $5.3 billion, up from $5.15 billion a year ago.

Lilly attributed the increased profitability to higher sales volumes in the face of adverse foreign-exchange rates.

Overseas, for example, sales of Zyprexa fell 8% compared with a year ago, a decline that Lilly blamed on currency fluctuations. In the U.S., sales of the anti-psychotic rose 3%.

As for the rest of 2009, Lilly revised its full-year EPS guidance (excluding items) to a range between $4.20 and $4.30. That's up from its previous forecast of $4 to $4.25. Wall Street analysts had been looking for full-year earnings of $4.23 a share.

Lilly's bigger rival, Pfizer, also announced results Wednesday, though it did not perform nearly as well.

Lilly shares were trading in pre-market action at $34.75, up 30 cents from their close in Tuesday's regular session.

Copyright 2009 TheStreet.com Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. AP contributed to this report.

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