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Jun 30, 2020
Eli Lilly Q2 2020 Earnings Report
Eli Lilly's financial results reflected variability caused by the COVID-19 pandemic, but underlying business fundamentals remained strong.
Key Takeaways
Eli Lilly reported a 2% decrease in revenue for Q2 2020, impacted by lower realized prices and the COVID-19 pandemic. Despite this, the company achieved several R&D milestones and raised EPS guidance for the year.
Revenue declined 2 percent, with volume growth of 6 percent offset by price decreases and foreign exchange impacts.
COVID-19 pandemic negatively impacted Q2 revenue by approximately $500 million due to decreased customer buying and delayed new patient prescription trends.
Operating expenses decreased 5 percent, driven by lower marketing expenses.
EPS increased to $1.55 on a reported basis and $1.89 on a non-GAAP basis.
Revenue by Segment
Revenue by Geographic Location
Forward Guidance
Eli Lilly updated its 2020 financial guidance, anticipating revenue between $23.7 billion and $24.2 billion and raising EPS guidance to $6.48 to $6.68 on a reported basis and $7.20 to $7.40 on a non-GAAP basis.
Positive Outlook
- Healthcare activity will align more closely with historical levels in the second half of 2020.
- New-to-brand prescription trends will improve in the U.S.
- Promotional spend will constitute a mix of in-person customer interactions, direct-to-consumer advertising and investments in digital promotion.
- Clinical trial enrollment in existing studies, as well as initiation of new clinical trials, will resume in the second half of 2020.
- Investment in COVID-19 related research, testing and support will continue throughout 2020.
Challenges Ahead
- Uncertainty surrounds the extent and duration of the impact of the COVID-19 pandemic.
- Increased utilization of patient affordability programs and changes in segment mix due to higher U.S. unemployment will have a modestly negative impact U.S. pricing.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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