Eli Lilly (LLY) Reaffirms FY12 Outlook, Issues Strong FY13 Expectations
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Price: $1,265.75 +1.72%
Financial Fact:
Cost of sales: 1.4B
Today's EPS Names:
BTTX, VAXX, ELYS, More
Financial Fact:
Cost of sales: 1.4B
Today's EPS Names:
BTTX, VAXX, ELYS, More
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Eli Lilly and Company (NYSE: LLY) commented on its 2012 financial guidance, announced its financial guidance for 2013 and reconfirmed its mid-term guidance through 2014.
Because the enactment of the American Taxpayer Relief Act of 2012 was not completed until 2013, certain provisions of the Act benefitting the company's 2012 federal taxes, including the extension of the R&D tax credit for 2012, cannot be recognized in the company's 2012 financial results and instead will be reflected in the company's 2013 financial results. The company plans to provide an update on the estimated financial implications of the Act as part of its fourth quarter and full-year 2012 financial results announcement on January 29, 2013.
The company previously published 2012 earnings per share guidance in the range of $3.68 to $3.78 on a reported basis, or $3.30 to $3.40 on a non-GAAP basis when excluding $.43 per share of income from the early payment of Amylin's exenatide revenue sharing obligation and $.05 per share of asset impairment and restructuring charges through the first nine months of 2012. As previously communicated, this guidance assumed that the 2012 tax benefits described above would be recorded in 2012. The company's financial expectations for 2012 are unchanged, except that both reported and non-GAAP earnings for the fourth quarter and full year of 2012 will not reflect the 2012 tax benefits described above.
The company's 2013 financial guidance excludes the one-time impact associated with 2012 that will be recorded in 2013 resulting from the delay in the enactment of the Act. For 2013, the company expects earnings per share to be in the range of $4.03 to $4.18 on a reported basis, or $3.75 to $3.90 on a non-GAAP basis when excluding an estimated $.28 per share of exenatide-related income contingent upon the transfer of exenatide commercial rights outside the U.S. to Amylin.
The company's 2013 financial guidance excludes the one-time impact associated with 2012 that will be recorded in 2013 resulting from the delay in the enactment of the Act. The company expects full-year 2013 earnings per share to be in the range of $4.03 to $4.18 on a reported basis, or $3.75 to $3.90 on a non-GAAP basis when excluding an estimated $.28 per share of exenatide-related income contingent upon the transfer of exenatide commercial rights outside the U.S. to Amylin.
*** The Street sees FY13 EPS of $3.71 and revs of $22.82 billion.
The company anticipates 2013 revenue of between $22.6 billion and $23.4 billion. Despite the initial impact of the U.S. Cymbalta patent expiration in the fourth quarter of 2013 and the loss of the on-going 15 percent royalty on worldwide exenatide sales, the company expects overall revenue growth, driven by a portfolio of products including Humalog®, Humulin®, Cialis®, Strattera®, Forteo®, Alimta®, Cymbalta® outside the U.S., Effient®, Tradjenta® and Axiron®, as well as animal health products. In addition, significant revenue growth is expected in Japan and the emerging markets, particularly China.
The company anticipates that gross margin as a percent of revenue will be approximately 78 percent.
Total operating expenses in 2013 are expected to be flat to slightly decreasing compared to 2012, reflecting continued expense controls and productivity gains. Marketing, selling and administrative expenses are expected in the range of $7.1 billion to $7.4 billion. Research and development expenses are expected to be in the range of $5.2 billion to $5.5 billion.
On a reported basis, other income and deductions is expected to be in a range between $340 million and $490 million of net income in 2013. On a non-GAAP basis, other income and deductions is expected to be in a range between $0 and $150 million of net expense, which excludes an estimated $490 million of deferred exenatide-related income contingent upon the transfer of exenatide commercial rights outside the U.S. to Amylin.
On a reported basis, the 2013 tax rate is expected to be approximately 22.5 percent, assuming a full-year 2013 benefit of the R&D tax credit. On a non-GAAP basis, the 2013 tax rate is expected to be approximately 21 percent. Both tax rates for 2013 exclude the one-time impact associated with 2012 that will be recorded in 2013 resulting from the delay in the enactment of the American Taxpayer Relief Act of 2012.
Operating cash flows are expected to be more than sufficient to allow for capital expenditures of approximately $900 million, fund potential business development activity, pay the company's dividend, and complete the company's previously announced $1.5 billion share repurchase program.
Because the enactment of the American Taxpayer Relief Act of 2012 was not completed until 2013, certain provisions of the Act benefitting the company's 2012 federal taxes, including the extension of the R&D tax credit for 2012, cannot be recognized in the company's 2012 financial results and instead will be reflected in the company's 2013 financial results. The company plans to provide an update on the estimated financial implications of the Act as part of its fourth quarter and full-year 2012 financial results announcement on January 29, 2013.
The company previously published 2012 earnings per share guidance in the range of $3.68 to $3.78 on a reported basis, or $3.30 to $3.40 on a non-GAAP basis when excluding $.43 per share of income from the early payment of Amylin's exenatide revenue sharing obligation and $.05 per share of asset impairment and restructuring charges through the first nine months of 2012. As previously communicated, this guidance assumed that the 2012 tax benefits described above would be recorded in 2012. The company's financial expectations for 2012 are unchanged, except that both reported and non-GAAP earnings for the fourth quarter and full year of 2012 will not reflect the 2012 tax benefits described above.
The company's 2013 financial guidance excludes the one-time impact associated with 2012 that will be recorded in 2013 resulting from the delay in the enactment of the Act. For 2013, the company expects earnings per share to be in the range of $4.03 to $4.18 on a reported basis, or $3.75 to $3.90 on a non-GAAP basis when excluding an estimated $.28 per share of exenatide-related income contingent upon the transfer of exenatide commercial rights outside the U.S. to Amylin.
The company's 2013 financial guidance excludes the one-time impact associated with 2012 that will be recorded in 2013 resulting from the delay in the enactment of the Act. The company expects full-year 2013 earnings per share to be in the range of $4.03 to $4.18 on a reported basis, or $3.75 to $3.90 on a non-GAAP basis when excluding an estimated $.28 per share of exenatide-related income contingent upon the transfer of exenatide commercial rights outside the U.S. to Amylin.
*** The Street sees FY13 EPS of $3.71 and revs of $22.82 billion.
The company anticipates 2013 revenue of between $22.6 billion and $23.4 billion. Despite the initial impact of the U.S. Cymbalta patent expiration in the fourth quarter of 2013 and the loss of the on-going 15 percent royalty on worldwide exenatide sales, the company expects overall revenue growth, driven by a portfolio of products including Humalog®, Humulin®, Cialis®, Strattera®, Forteo®, Alimta®, Cymbalta® outside the U.S., Effient®, Tradjenta® and Axiron®, as well as animal health products. In addition, significant revenue growth is expected in Japan and the emerging markets, particularly China.
The company anticipates that gross margin as a percent of revenue will be approximately 78 percent.
Total operating expenses in 2013 are expected to be flat to slightly decreasing compared to 2012, reflecting continued expense controls and productivity gains. Marketing, selling and administrative expenses are expected in the range of $7.1 billion to $7.4 billion. Research and development expenses are expected to be in the range of $5.2 billion to $5.5 billion.
On a reported basis, other income and deductions is expected to be in a range between $340 million and $490 million of net income in 2013. On a non-GAAP basis, other income and deductions is expected to be in a range between $0 and $150 million of net expense, which excludes an estimated $490 million of deferred exenatide-related income contingent upon the transfer of exenatide commercial rights outside the U.S. to Amylin.
On a reported basis, the 2013 tax rate is expected to be approximately 22.5 percent, assuming a full-year 2013 benefit of the R&D tax credit. On a non-GAAP basis, the 2013 tax rate is expected to be approximately 21 percent. Both tax rates for 2013 exclude the one-time impact associated with 2012 that will be recorded in 2013 resulting from the delay in the enactment of the American Taxpayer Relief Act of 2012.
Operating cash flows are expected to be more than sufficient to allow for capital expenditures of approximately $900 million, fund potential business development activity, pay the company's dividend, and complete the company's previously announced $1.5 billion share repurchase program.
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