NYSE$ELAN

Elanco Animal Health Inc · Q3 2022 earnings

Q3 2022 earnings · · Investor relations

Briefing

Elanco faced topline pressure but delivered 5% adjusted EPS growth, expanded adjusted EBITDA margin by 120 basis points and reduced gross debt.

Elanco Animal Health reported a 9% decrease in revenue, but a 5% increase in adjusted EPS. The company is reducing its full year financial outlook due to foreign exchange headwinds, the global economic slowdown and continued impacts of COVID-19 lockdowns in China.

  • Revenue was $1,028 million, a decrease of 9% on a reported basis, or a decrease of 4% excluding the unfavorable impact of foreign exchange rates.
  • Pet Health revenue was $471 million, a decrease of 11% on a reported basis or a decrease of 7% excluding the unfavorable impact from foreign exchange rates, with a 4% increase from price in the quarter.
  • Farm Animal revenue was $545 million, a decrease of 7% on a reported basis or flat excluding the unfavorable impact from foreign exchange rates, with a 3% increase from price.
  • Adjusted EBITDA was $205 million, a decrease of 3% compared to the third quarter of 2021.

Headline financials

Total Revenue

$1.03B

Previous: $1.13B-9.1%
EPS (adj)

$0.20

Previous: $0.19+5.3%
Capital Expenditures

-$71M

Previous: -$60M-18.3%
Free Cash Flow

-$120M

Previous: -$164M+26.8%
Net Income

-$49M

Previous: -$104M+52.9%
Operating Income

-$1.02B

Previous: -$1.16B+12.2%
Gross Profit

$556M

Previous: $629M-11.6%
Cash & Equivalents

$460M

Previous: $453M+1.5%
Total Assets

$14.9B

Previous: $16.6B-9.8%
Stock-Based Comp

$13M

Previous: $17M-23.5%

Revenue & EPS history

Elanco · Revenue · Quarterly

$1.03B

Q3 2022-9.1%vs Q3 2021
Beat estimate in 10 of 15 quarters(67%)
ActualEstimate

Revenue by segment

Elanco · $947M total across 4 segments · Q3 2022

  • Pet Health
    $471M+11.6%
  • Cattle
    $233M-6.0%
  • Poultry
    $159M+18.7%
  • Swine
    $84M-30.6%

Forward guidance

Elanco is updating financial guidance for the full year 2022 and providing financial guidance for the fourth quarter of 2022.

Tailwinds

  • Confident in ability to expand margins over time
  • Generate cash to pay down debt
  • Bring differentiated innovation to the market

Headwinds

  • Worsening macro-economic and environmental pressures
  • Continued strength of the U.S. dollar
  • Economic impacts from China's continued COVID-19 lockdowns
  • Impact of the global economic slowdown on Europe
  • Impact of the global economic slowdown on U.S. pet retail markets

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 20 quarterly earnings reports · overlaid with Q3 2022

Historical avgQ3 2022

+2.0%

Avg return

Earnings day

+2.8%

Avg return

5 days after

+1.1%

Avg return

30 days after

52%

16 / 31 earnings

Positive

+27.2%

Q1 2024

Best reaction

-16.3%

Q2 2021

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q1 2026+13.9%-5.6%+2.6%
Q4 2025+7.3%+6.7%-0.7%
Q3 2025-4.2%-1.0%-2.7%
Q1 2025+26.2%+34.8%+46.2%
Q4 2024-3.7%+0.5%-2.7%
Q3 2024+9.4%+9.8%-2.8%
Q2 2024+5.3%+12.6%+21.9%
Q1 2024+27.2%+25.7%+34.7%
Q4 2023+0.5%-2.1%-1.2%
Q3 2023+15.9%+14.1%+36.4%
Q2 2023+7.0%+4.5%+2.7%
Q1 2023-3.8%-8.4%-0.1%
Q4 2022-6.9%-11.0%-33.1%
Q3 2022-10.3%+0.4%-6.7%
Q2 2022-1.6%+3.3%-23.9%
Q1 2022-7.9%-6.4%+1.5%
Q4 2021+8.2%+12.4%+3.3%
Q3 2021+1.2%+0.3%-14.3%
Q2 2021-16.3%-12.3%-4.2%
Q1 2021+3.8%+3.4%+10.1%
Q4 2020+2.8%+9.0%-9.8%
Q3 2020-4.7%-8.0%-9.8%
Q2 2020+11.7%+17.3%+37.7%
Q1 2020-13.5%-12.9%+3.6%
Q4 2019-0.7%-1.4%-42.5%
Q3 2019-1.9%-3.1%-1.2%
Q2 2018-4.8%-1.3%-4.6%
Q2 2019-4.8%-1.3%-4.6%
Q1 2019+6.1%+3.9%+4.1%
Q4 2018-2.4%-1.7%-2.7%
Q3 2018+3.7%+3.7%-1.9%
Q1 2018
Q4 2017
Q3 2017
Q2 2017
Q1 2017

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