Elanco Animal Health Inc (ELAN) Reports 4% Revenue Growth in Q3 2023
Elanco Animal Health Inc (NYSE:ELAN) reports Q3 2023 revenue of $1,068 million, a 4% growth.
Reported net loss stands at $1,096 million, largely due to a non-cash goodwill impairment charge of $1,042 million.
Adjusted EBITDA for Q3 2023 is $214 million, representing 20.0% of revenue.
Full year 2023 guidance updated to reflect Q3 outperformance and expected impact of foreign exchange rates.
Elanco Animal Health Inc (NYSE:ELAN) released its third quarter 2023 earnings report on November 7, 2023. The company reported a 4% growth in revenue, reaching $1,068 million. Despite this, ELAN reported a net loss of $1,096 million, largely due to a non-cash goodwill impairment charge of $1,042 million. The company's adjusted EBITDA for the quarter was $214 million, representing 20.0% of revenue.
Financial Performance
ELAN's Pet Health revenue increased by 6% to $495 million, driven by price growth, improved market conditions in Europe, and improved supply for vaccines in the U.S. Farm Animal revenue also increased by 3% to $561 million, primarily driven by revenue from new products and strength in European poultry.
The company's gross profit was $581 million, or 54.4% of revenue on a reported basis, and $582 million, or 54.5% of revenue on an adjusted basis. This increase was primarily driven by improved price and productivity, partially offset by inflation, inventory losses, and planned reduced throughput at certain manufacturing sites.
ELAN's total operating expense for Q3 2023 was $399 million. Marketing, selling, and administrative expenses increased by 5% to $313 million, primarily driven by higher employee-related expenses and increased promotional spend.
Updated Full Year 2023 Guidance
ELAN has updated its full year 2023 guidance to reflect Q3 outperformance and the expected unfavorable impact of foreign exchange rates. The company now expects revenue of $4,360 to $4,400 million, a reported net loss of $1,174 to $1,204 million, and an adjusted EPS of $0.88 to $0.94.
Business Highlights
ELAN completed U.S Food and Drug Administration (FDA) submissions for Credelio Quattro, a broad spectrum parasiticide product for dogs, and Bovaer, a feed additive to reduce methane emissions for Dairy cows. The company also received approval for Elura for stimulation of appetite and weight gain in cats in the EU and Credelio Cat for treatment and prevention of fleas and ticks in China.
"Our return to revenue growth in the third quarter and related growth in adjusted EBITDA and adjusted EPS was driven by improvement across both pet health and farm animal. The outperformance in the third quarter allowed us to increase the midpoint of our expectations for constant currency revenue growth, adjusted EBITDA and adjusted EPS, while covering the expected negative impact of the foreign exchange rates. Business execution paired with company-wide efforts to manage balance sheet inventory and improve working capital are leading to increased cash flow generation," said Todd Young, Elanco Executive vice president and CFO.
Explore the complete 8-K earnings release (here) from Elanco Animal Health Inc for further details.
This article first appeared on GuruFocus.
