For the period ending June 30th Elanco Animal Health Inc. reported revenue of $586 million compared to $781 million for the corresponding second quarter of fiscal 2019. Net loss for the quarter was $53.2 million compared to a profit of $35.9 million in Q2, 2019. The most recently completed quarter included a provision of $119 million for asset impairment and restructuring compared to an expense of $32 million in Q2, 2019. The quarter also included a net income of $48 million associated with disposal of facilities mandated by the acquisition of Bayer AG Animal Health. Diluted EPS was a loss of $0.13 compared to a positive $0.10 in Q2 2019. The breakdown of sales for the quarter included companion animals at 43 percent and food animals representing 54 percent with the remainder classified as “strategic exits”.
Management provided financial guidance for the third quarter with revenue in the range of $660 to $710 million. The company anticipates that sales will be reduced by $30 to $50 million as a result of COVID-19.
The Food Animal Ruminant and Swine segments posted a 52 percent decrease in revenue for the quarter attributed to lower demand in key products including Rumensin® and Paylean® and Optaflexx®.
With regard to the acquisition of Bayer AG Animal Health business, significant progress has been made with regard to antitrust clearances from the European Commission and the U.S. Federal Trade Commission with Australia, Brazil, Canada, Mexico and New Zealand yet to be finalized.
Jeff Simmons, president and CEO stated, “Our team has diligently navigated challenges during the second quarter. When our performance was significantly affected by actions to reduce channel inventory and by pandemic-related impacts our efforts are already yielding results including better competitive positioning and greater financial flexibility.”
Elanco Animal Health (ELAN) has a market capitalization of $9.4 billion and has traded over 52 weeks in a range from $15.17 to $33.92 with a 50 week moving average of $22.27. The trailing 12 month operating margin is 7.6 percent and profit margin -3.6 percent. The return on assets is 1.4 percent and on equity -1.7 percent.
Elanco traded at $25.36 up 2.3 percent shortly before the close on Wednesday 5th August.