Eli Lilly 1Q profit falls 5 percent on costs

[April 20, 2010]  NEW YORK (AP) -- Eli Lilly and Co. said Monday its first-quarter profit fell 5 percent, as the drugmaker took charges tied to health reform and increased spending on research, development and marketing.

Eli Lilly also reduced its full-year profit outlook due to health overhaul related charges.

The Indianapolis company said it earned $1.25 billion, or $1.13 per share, in the three months that ended March 31. That's down from the $1.31 billion, or $1.20 per share, last year.

Excluding charges, profit was $1.18 per share.

Revenue rose 9 percent to $5.49 billion.

Analyst polled by Thomson Reuters forecast a profit of $1.10 per share on revenue of $5.54 billion, on average.

Marketing, selling and administrative costs rose 6 percent to $1.61 billion while research and development costs rose 10 percent to $1.04 billion. Meanwhile, the company said its tax rate rose because of a $85.1 million charge related to prescription drug subsidy for its retiree health plan as part of health care reform. Also, a research and development tax credit expired.

Sales for Lilly's best-selling drug, the antipsychotic Zyprexa, rose 8 percent, while revenue from its second-best seller, the antidepressant Cymbalta, rose 13 percent.

Eli Lilly expects profit between $4.40 and $4.55 in 2010, including a 35 cents per share charge related to health care reform. Analysts expect $4.73 per share.

[Associated Press]

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