(By Tim) Pharmaceutical manufacturer Eli Lilly and Company (NYSE: LLY) will release the company's financial results for the 1st quarter of 2010 on April 19, 2010 before the market open. A conference call to discuss the results will be held at 9:00 AM EST that morning.
Eli Lilly and Company discovers, develops, manufactures, and sells products in one significant business segment -pharmaceutical products. The company directs its research efforts primarily toward the search for products to diagnose, prevent and treat human diseases. The company also conducts research to find products to treat diseases in animals and to increase the efficiency of animal food production.
The consensus estimate of the 16 analysts following the stock is $1.10 in earnings per share for the quarter on revenues of $5.51 billion. A year earlier Lilly reported a net of $1.20 per share on sales of $5.05 billion. The analyst's estimates range from a low of $1.01 up to $1.21 per share and revenues are expected to be between $5.38 and $5.70 billion. That 20¢ spread indicates a fairly high level of uncertainty about the quarter or there are a couple of lost souls in the bunch.
For the first quarter of 2009, Lilly surprised Wall Street by handily surpassing the 99¢ earnings estimate by 21%. The 2nd and 3rd quarters were less dramatic, but the company did manage to fair better than the expectations. For the 4th quarter of 2009 earning were a penny light of the consensus at 91¢ per share.
Eli Lilly is a major pharmaceutical manufacturer, an industry where a company's high revenue products eventually run out of patent protection and the companies must always be looking for the next blockbuster drugs. Expansion in Latin America and China have yet to produce meaning full results for Lilly. The result of this uncertainty is a stock that trades at less than 8 times projected 2010 earnings and has a dividend yield of over 5%.
In comparison, the average PE of the major drug manufacturers is 14. Competitors like Pfizer (NYSE: PFE), Novartis (NYSE: NVS) and Merck (NYSE: MRK) have price-to-earnings ratios of 14, 14 and 6.5 respectively. Everybody's favorite drug company (or so it seems) Teva Pharmaceuticals (Nasdaq: TEVA) has a forward PE of 14 and a trailing PE of 28.
This sleepy stock is only 30% higher than it was at the bottom of the bear market on March 9,2009. Actually, the stock gained $6.00 right after the bottom and LLY is just 7% higher than it was on March 23, 2009. Not much has happened to the value of Lilly stock in the past year.
At the end of 2009, Lilly management forecast 2010 earnings of $4.65 to $4.85 per share. The Wall Street analysts have gone out on a limb and forecast $4.73 for the 2010 net. An earnings surprise from Eli Lilly would really be a surprise! These expectations are backed up by the company's option trading. Implied volatility has declined from 22% to 18% over the last month.
