updated 4/20/2006 2:18:09 PM ET 2006-04-20T18:18:09

Pharmaceutical maker Eli Lilly and Co. on Thursday said strong sales of its antidepressant, Cymbalta, and other newer drugs helped boost profit by 13 percent in the first quarter.

But Lilly’s stock tumbled following the release of the earnings report, which missed revenue projections and offered lower-than-expected earnings forecasts for the second quarter.

“It’s a mixed quarter and a mixed outlook,” said George Farra, a principal with Woodley Farra Manion Portfolio Management in Indianapolis.

Lilly earned $834.8 million, or 77 cents per share, for the January-March period, up from $736.6 million, or 68 cents a share, a year earlier.

The Indianapolis-based company’s earnings topped the average estimate of 75 cents per share from analysts polled by Thomson Financial, but its sales were shy of the consensus target of $3.8 billion.

Sales totaled $3.72 billion, a 6 percent increase from $3.5 billion a year earlier.

Lilly executives forecast second-quarter earnings of 74 cents to 76 cents per share and held its projection for 2006 income of $3.10 to $3.20 per share with sales growth of 7 percent to 9 percent.

Analysts expected second-quarter income of 77 cents per share on $3.91 billion in revenue, and full-year income of $3.13 per share on $15.64 billion in sales.

Lilly said its first-quarter growth was led by newer products such as Cymbalta, whose sales more than doubled to $233.3 million. Osteoporosis treatment Forteo sales surged 90 percent to $127.1 million. Sales of cancer treatment Gemzar gained 11 percent to $338.8 million.

But the company continues to be vexed by declining use of its top-selling anti-psychotic drug, Zyprexa, which slid 3 percent to $1.01 billion. Zyprexa accounts for about one-quarter of the company’s total sales.

“Zyprexa is still the tail wagging the dog,” Farra said.

In the U.S., Zyprexa sales decreased 5 percent. Because of changes in the foreign-exchange rate, sales for the drug overseas dropped by 1 percent.

Still, executives said they were buoyed by a 20 percent increase in Zyprexa prescriptions in Japan and an increase in the institutional use of the drug in the U.S. — the first such increase in more than two years.

Jim Greffet, manager of investor relations, said institutional use of Zyprexa accounts for 40 percent of its U.S. sales.

“We’re hoping to see similar results in that retail segment that we’re starting to see now in that institutional segment,” he said.

Banc of America Securities analyst Chris Schott said in a research note that he had expected the company’s Cymbalta sales to be even higher, at $250 million. He also blamed Lilly’s failure to meet analysts’ revenue projections on overseas sales.

“This trend ... is suggesting that currency impact in the quarter may have been greater than we had anticipated,” he wrote.

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