Elanco Animal Health Stock Gains On Strong Q2 Earnings, Upbeat Annual Guidance

Elanco Animal Health Inc ELAN has reported a Q2 FY23 revenue of $1.06 billion. That's a decrease of 10% Y/Y on a reported basis, or down 9%, excluding the unfavorable impact of foreign exchange rates, above the consensus of $1.04 billion. The management expected Q2 revenues of $1.00-1.05 billion. 

The company says revenues were impacted by an estimated $90-$110 million of revenue related to customer purchasing shifted from the second quarter into the first due to the ERP system commercial ordering blackout period for legacy Bayer Animal Health products in April.

Adjusted EPS of $0.18, below the $0.39 reported a year ago, surpassing the management guidance of $0.00-$0.05 and analysts' view of $0.05.

Pet Health's revenue decreased by 15% (-14% CER) to $518 million, with a 4% increase in price. Farm Animal revenue decreased 5% (-3% CER) to $527 million.

Guidance: Elanco raises FY23 revenue guidance to $4.35-$4.41 billion compared to prior guidance of $4.31-$4.4 billion and the consensus of $4.35 billion.

The raised revenue guidance is driven by increased expectations for U.S. Pet Health, poultry, and aqua, partially offset by lowered expectations for U.S. Farm Animal and contract manufacturing revenue.

It forecasts adjusted EPS of $0.80-$0.89 versus the consensus of $0.80 and the prior guidance of $0.76-$0.83.

For Q3, the company expects revenue guidance of $1.03-$1.06 billion compared to the consensus of $1.04 billion.

Elanco forecasts Q3 adjusted EPS of $0.08-$0.13 versus the consensus of $0.16.

Price Action: ELAN shares are up 8.03% at $12.59 on the last check Monday.