This is starting to become a tradition or something. For the second quarter in a row, Eli Lilly
Such is the life of a drugmaker headed toward a patent cliff. Increased sales are just seen as increasing the burden it'll have when drugs start to face generic competition.
The quality of the increased earnings could also have affected investors' feelings about the quarter. A decreased tax rate and lower cost of foreign goods contributed to the increase in adjusted earnings. Not something that's exactly repeatable for years to come.
The 22% increase in adjusted earnings was also artificially inflated in my opinion. I'm generally OK with companies removing one-time costs to get reasonable year-over-year comparisons; GAAP earnings can lead to distorted comparisons like Pfizer's
On the revenue side, that makes sense; investors would like to know the real rate of sales growth ignoring extrinsic growth through acquisitions. But on the earnings side, it seems to be stepping over the line of useful information. Management decided to outbid Bristol-Myers Squibb
Stepping down from my soapbox, I have to say that management isn't doing everything wrong. On the conference call, management was very clear that they're focused on the pipeline rather than on making a large acquisition like Pfizer and Merck
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