By Dean Seal

Eli Lilly, a renowned pharmaceutical company, experienced significant revenue growth in the last quarter of 2023, primarily driven by higher prices and increased volume sales of its popular weight-loss drugs.

The company reported a profit of $2.19 billion, or $2.42 per share, compared to $1.94 billion, or $2.14 per share, in the same quarter the previous year.

Impressive Earnings Exceed Analyst Expectations

After adjusting for one-time items, the adjusted earnings per share stood at $2.49. This exceeded the expectations of analysts polled by FactSet, who had predicted earnings of $2.30 per share.

Revenue Surpasses Estimates

Eli Lilly's revenue for the quarter reached $9.35 billion, surpassing both the previous year's figure of $7.3 billion and analysts' estimates of $8.95 billion, according to FactSet.

Factors Driving Revenue Growth

The remarkable 28% increase in revenue was fueled by the success of new products, particularly the weight-loss drugs Mounjaro and Zepbound. Additionally, higher prices and volumes contributed to the substantial growth. The company also benefited from favorable foreign exchange rates. Though the prices of Humalog insulin and the diabetes treatment Trulicity decreased, the higher prices of Mounjaro compensated for it.

Gross Margin Improvement Offset by Increased Manufacturing Costs

The higher realized prices resulted in an improvement in gross margin, which reached 80.9% of revenue—a 2.1 percentage point increase. However, the company faced headwinds due to increased labor costs and capacity expansion, resulting in higher manufacturing expenses.

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