Yahoo Finance Lilly (LLY) Reliance on International Sales: What Investors Need to Know
Did you analyze how Eli Lilly (LLY) fared in its international operations for the quarter ending March 2024? Given the widespread global presence of this drugmaker, scrutinizing the trends in international revenues becomes imperative to assess its financial strength and future growth possibilities.
In the modern, closely-knit global economic landscape, the capacity of a business to access foreign markets is often a key determinant of its financial well-being and growth path. Investors now place great importance on grasping the extent of a company's dependence on international markets, as it sheds light on the firm's earnings stability, its skill in leveraging various economic cycles and its broad growth potential.
Being present in international markets serves as a counterbalance to domestic economic challenges while offering chances to engage with more rapidly evolving economies. However, this kind of diversification introduces challenges like currency fluctuations, geopolitical uncertainties and varying market trends.
Our review of LLY's last quarterly performance uncovered some notable trends in the revenue contributions from its international markets, which are commonly analyzed and tracked by Wall Street experts.
The recent quarter saw the company's total revenue reaching $8.77 billion, marking an improvement of 26% from the prior-year quarter. Next, we'll examine the breakdown of LLY's revenue from abroad to comprehend the significance of its international presence.
A Look into LLY's International Revenue Streams
Of the total revenue, $1.44 billion came from Europe during the last fiscal quarter, accounting for 16.4%. This represented a surprise of +8.73% as analysts had expected the region to contribute $1.33 billion to the total revenue. In comparison, the region contributed $1.34 billion, or 14.3%, and $1.09 billion, or 15.7%, to total revenue in the previous and year-ago quarters, respectively.
Japan accounted for 4.2% of the company's total revenue during the quarter, translating to $363.9 million. Revenues from this region represented a surprise of -5.46%, with Wall Street analysts collectively expecting $384.92 million. When compared to the preceding quarter and the same quarter in the previous year, Japan contributed $439.1 million (4.7%) and $387.2 million (5.6%) to the total revenue, respectively.
China generated $376.2 million in revenues for the company in the last quarter, constituting 4.3% of the total. This represented a surprise of +6.69% compared to the $352.6 million projected by Wall Street analysts. Comparatively, in the previous quarter, China accounted for $377.1 million (4%), and in the year-ago quarter, it contributed $372.7 million (5.4%) to the total revenue.
During the quarter, Other foreign countries contributed $892.9 million in revenue, making up 10.2% of the total revenue. When compared to the consensus estimate of $670.75 million, this meant a surprise of +33.12%. Looking back, Other foreign countries contributed $744.4 million, or 8%, in the previous quarter, and $673.1 million, or 9.7%, in the same quarter of the previous year.
Projected Revenues in Foreign Markets
For the current fiscal quarter, it is anticipated by Wall Street analysts that Lilly will report a total revenue of $9.81 billion, which reflects an increase of 18% from the same quarter in the previous year. The revenue contributions are expected to be 16.2% from Europe ($1.59 billion), 4.5% from Japan ($438.59 million), 4% from China ($395.93 million) and 7.8% from Other foreign countries ($764.71 million).
For the full year, the company is projected to achieve a total revenue of $43.01 billion, which signifies a rise of 26.1% from the last year. The share of this revenue from various regions is expected to be: Europe at 14.7% ($6.34 billion), Japan at 4.1% ($1.75 billion), China at 3.7% ($1.59 billion) and Other foreign countries at 7.1% ($3.06 billion).
Concluding Remarks
Relying on international markets for revenues, Lilly faces both prospects and perils. Thus, tracking the company's international revenue trends is essential for accurately projecting its future trajectory.
In an era of growing international interdependencies and escalating geopolitical disputes, Wall Street analysts are vigilant in tracking these trends for businesses with a global reach, in order to refine their predictions of earnings. It should be noted, however, that a multitude of other elements, such as a company's domestic position, also play a significant role in shaping the earnings forecasts.
At Zacks, we place significant importance on a company's evolving earnings outlook. This is based on empirical evidence demonstrating its strong influence on a stock's short -term price movements. Invariably, there exists a positive relationship -- an upward revision in earnings estimates is typically mirrored by a rise in the stock price.
The Zacks Rank, our proprietary stock rating tool, comes with an externally validated impressive track record. It effectively utilizes shifts in earnings projections to act as a dependable barometer for forecasting short-term stock price trends.
Currently, Lilly holds a Zacks Rank #3 (Hold), signifying its potential to match the overall market's performance in the forthcoming period. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
A Review of Lilly's Recent Stock Market Performance
Over the past month, the stock has lost 6.3% versus the Zacks S&P 500 composite's 1.6% decrease. The Zacks Medical sector, of which Lilly is a part, has declined 1.4% over the same period. The company's shares have declined 0.7% over the past three months compared to the S&P 500's 3.8% increase. Over the same period, the sector has declined 0.9%.
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Eli Lilly and Company (LLY) : Free Stock Analysis Report
