Eli Lilly (LLY) Trims FY12 non-GAAP EPS Outlook on Amylin Payment
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Eli Lilly and Company (NYSE: LLY) has revised certain elements of its 2012 reported financial guidance to reflect additional income the company will recognize as a result of the early payment of financial obligations from Amylin Pharmaceuticals.
Following the completion of its acquisition by Bristol-Myers Squibb, Amylin has paid to Lilly $1.259 billion in satisfaction of its revenue sharing obligation with respect to exenatide. As a result, Lilly will recognize income in the third quarter of 2012 of approximately $790 million (pre-tax), or approximately $.43 per share (after-tax). In addition to income previously deferred pursuant to this arrangement, Lilly also expects to recognize income in 2013 related to this payment of approximately $425 million (pre-tax), or approximately $.25 per share (after-tax), contingent upon transfer of exenatide commercial rights outside the U.S. to Amylin. Currently, Lilly anticipates these rights will be transferred to Amylin over the course of 2013. In addition, Amylin has also repaid in full to Lilly a $165 million loan and accrued interest.
Sees FY12 EPS of $3.30 - $3.40, versus views of $3.37.
The company still anticipates 2012 revenue of between $21.8 and $22.8 billion.
The company still anticipates that gross margin as a percent of revenue will be approximately 78 percent in 2012.
The company still expects to keep 2012 operating expenses essentially flat compared to 2011. Marketing, selling and administrative expenses are still expected to decline and to be in the range of $7.3 billion to $7.7 billion. Research and development expense is still expected to be flat to increasing and in the range of $5.0 billion to $5.3 billion.
On a reported basis, other income and deductions is now expected to be in a range between $715 million and $840 million of net income in 2012. On a non-GAAP basis, other income and deductions is still expected to be in a range between net expense of $75 million and net income of $50 million in 2012.
On a reported basis, the 2012 tax rate is now expected to be approximately 23.5 percent. On a non-GAAP basis, the 2012 tax rate is still expected to be approximately 21 percent. Both tax rates assume the extension of the R&D tax credit for the full year 2012.
Operating cash flows in 2012 are still expected to be more than sufficient to fund capital expenditures of approximately $800 million, as well as anticipated business development activity, the company's current dividend and stock repurchases.
Following the completion of its acquisition by Bristol-Myers Squibb, Amylin has paid to Lilly $1.259 billion in satisfaction of its revenue sharing obligation with respect to exenatide. As a result, Lilly will recognize income in the third quarter of 2012 of approximately $790 million (pre-tax), or approximately $.43 per share (after-tax). In addition to income previously deferred pursuant to this arrangement, Lilly also expects to recognize income in 2013 related to this payment of approximately $425 million (pre-tax), or approximately $.25 per share (after-tax), contingent upon transfer of exenatide commercial rights outside the U.S. to Amylin. Currently, Lilly anticipates these rights will be transferred to Amylin over the course of 2013. In addition, Amylin has also repaid in full to Lilly a $165 million loan and accrued interest.
Sees FY12 EPS of $3.30 - $3.40, versus views of $3.37.
The company still anticipates 2012 revenue of between $21.8 and $22.8 billion.
The company still anticipates that gross margin as a percent of revenue will be approximately 78 percent in 2012.
The company still expects to keep 2012 operating expenses essentially flat compared to 2011. Marketing, selling and administrative expenses are still expected to decline and to be in the range of $7.3 billion to $7.7 billion. Research and development expense is still expected to be flat to increasing and in the range of $5.0 billion to $5.3 billion.
On a reported basis, other income and deductions is now expected to be in a range between $715 million and $840 million of net income in 2012. On a non-GAAP basis, other income and deductions is still expected to be in a range between net expense of $75 million and net income of $50 million in 2012.
On a reported basis, the 2012 tax rate is now expected to be approximately 23.5 percent. On a non-GAAP basis, the 2012 tax rate is still expected to be approximately 21 percent. Both tax rates assume the extension of the R&D tax credit for the full year 2012.
Operating cash flows in 2012 are still expected to be more than sufficient to fund capital expenditures of approximately $800 million, as well as anticipated business development activity, the company's current dividend and stock repurchases.
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