Eli Lilly 2Q profit slips on research and development charges

Eli Lilly and Co. said Tuesday its second-quarter profit declined 19 percent on charges related to acquisitions.

Its adjusted earnings beat Wall Street expectations, however, and the company raised its outlook for the full year.

The drugmaker reported that earnings fell to $663.6 million, or 61 cents per share, from $822 million, or 76 cents per share, in the previous year.

The latest-quarter's results were weighted by the acquisitions of Hypnion Inc. and Ivy Animal Health Inc., which sapped 29 cents per share. Lilly took on charges from research and development started by the companies before the acquisition, spokesman Mark Taylor said.

Excluding those one-time charges, adjusted earnings totaled $978.7 million, or 90 cents per share.

Analysts expected net income of 82 cents per share on sales of $4.39 billion, according to a Thomson Financial poll.

Quarterly revenue increased to $4.63 billion, up 20 percent from $3.87 billion a year ago. Sales of the depression treatment Cymbalta surged 67 percent to $519.5 million, from $310.4 million.

The anti-psychotic Zyprexa, Lilly's top-selling drug, saw sales increase 9 percent to $1.2 billion, up from $1.1 billion. International sales of the drug grew 14 percent, driven by volume increases and the impact of foreign exchange rates. U.S. sales grew 4 percent.

Lilly raised its 2007 sales and profit guidance and is now forecasting full-year adjusted earnings per share in the range of $3.40 to $3.50, or $2.75 to $2.85 per share on a reported basis.

The company expects sales to grow in the mid-teens, and pro forma sales to grow in the low-double digits.

On average, analysts were seeking profit of $3.39 per share on revenue of $17.67 billion for fiscal 2007.

Its shares rose 99 cents to $58.16 at the open of trading Tuesday.