Lilly Earnings Dive on Patent Expiration (LLY)

Drug maker Eli Lilly & Co. reported fourth quarter and full year earnings this morning, and although revenues were higher than expected, net income fell and EPS missed estimates. Lilly lost patent protection on Zyprexa, its best-selling anti-psychotic, in October.

The company reported fourth quarter revenues of $6.05 billion, better than the consensus estimate of $5.89 billion but down -2% from the same period in 2010. EPS came in at $0.77 on net income of $858.2 million. In 2010, net income totaled $1.17 billion and EPS came in at $1.05, both 27% higher than this year’s totals. Adjusted EPS totaled $0.87, better than the consensus estimate of $0.81.

Lilly confirmed its guidance for 2012, forecasting EPS of $3.10-$3.20, down from $3.90 in 2011. Analysts expected $3.19. Full-year revenue is forecast at $21.8-$22.8 billion, which includes a $3 billion drop in sales of Zyprexa. Gross margin for 2012 is forecast at around 77%.