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Elanco Animal's Outlook Lags Street Expectations But Analyst Sees Time For Elanco's Commercial Investment To Payoff
ELANElanco(ELAN) Benzinga·2025-02-25 18:38

Core Insights - Elanco Animal Health reported fourth-quarter revenue of 1.02billion,adecreaseof11.02 billion, a decrease of 1% on a reported basis but a 4% organic constant currency growth, surpassing the consensus estimate of 1.01 billion [1] - The company reported adjusted EPS of 14 cents, an increase from 8 cents year-over-year, but fell short of the consensus estimate of 15 cents [1] Pet Health Segment - Pet Health revenue reached 439million,reflectinga6439 million, reflecting a 6% year-over-year increase, with a 3% price increase contributing to this growth, driven by strong performance in the global over-the-counter retail parasiticide business and new products like Zenrelia and Credelio Plus, although competitive pressures in the U.S. veterinary channel partially offset these gains [2] Farm Animal Segment - Farm Animal revenue was 570 million, showing a 7% decrease on a reported basis but a 2% increase on an organic constant currency basis, with a 3% contribution from price in the fourth quarter; strong demand for Experior and Rumensin in the U.S. and swine across multiple geographies supported the organic growth [3] Financial Metrics - Adjusted EBITDA was 177million,markinga7177 million, marking a 7% increase, with an adjusted EBITDA margin of 17.4%, up 150 basis points [3] Future Guidance - For 2025, Elanco expects revenues between 4.45 billion and 4.51billion,slightlybelowtheconsensusof4.51 billion, slightly below the consensus of 4.53 billion, and adjusted EPS in the range of 80-86 cents, compared to the consensus of 90 cents; the company anticipates a revenue headwind of approximately 110millionduetounfavorableforeignexchangerates[4]ManagementCommentary−Thecompanyisfocusedonacceleratingorganicconstantcurrencyrevenuegrowthfor2025andimprovingearningspotentialwhilenavigatingadynamicmacroeconomicenvironment;adjustmentsmadewereprimarilyforincrementalcurrencyheadwinds[5]Q12025Expectations−Forthefirstquarterof2025,Elancoprojectsrevenuesof110 million due to unfavorable foreign exchange rates [4] Management Commentary - The company is focused on accelerating organic constant currency revenue growth for 2025 and improving earnings potential while navigating a dynamic macroeconomic environment; adjustments made were primarily for incremental currency headwinds [5] Q1 2025 Expectations - For the first quarter of 2025, Elanco projects revenues of 1.16 billion to 1.18billion,belowtheconsensusof1.18 billion, below the consensus of 1.21 billion, and adjusted EPS of 29-34 cents, compared to the consensus of 30 cents [6] Stock Performance - Elanco's stock is down 4.68% at $10.59 as of the last check on Tuesday [7]