Drugmaker Eli Lilly forecasts return to earnings growth in 2015, but Wall Street expects more


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INDIANAPOLIS — Drugmaker Eli Lilly predicts a return to earnings growth this year after enduring a tough 2014, but the projected growth is below Wall Street expectations. Its shares slipped in morning trading Wednesday.

The maker of the antidepressant Cymbalta said it expects adjusted earnings to range between $3.10 and $3.20 per share on between $20.3 billion and $20.8 billion in revenue in the new year, as it continues to recover from the loss of patents protecting several key products from cheaper generic drugs.

That would represent as much as 17 percent growth from its forecast for 2014 earnings of between $2.72 and $2.80 per share.

However, the 2015 guidance falls short of average analyst expectations for earnings of $3.25 per share on $20.96 billion in revenue, according to the data firm FactSet.

Eli Lilly and Co., also known for its portfolio of diabetes and cancer treatments, saw earnings and revenue slump last year after losing patent protection for Cymbalta, a top seller that once pulled in about $5 billion in annual global revenue. Lilly, which has also lost patent protection for other key products, has long warned of this performance drop and said 2014 would be the most challenging year of its patent expiration period.

But company leaders also have said they expect to return to growth after 2014, with help from new drugs, existing products, cost cutting and the company's growing animal health business. On Jan. 1, Lilly said it finished its $5.4 billion acquisition of the animal health division belonging to Swiss drugmaker Novartis.

The lower-than-expected forecast was not a complete surprise, given that it involved uncertainties like foreign exchange rates and the impact of the Novartis deal, said Dr. Tim Anderson, an analyst who covers the company for BernsteinResearch.

On Wednesday, Lilly shares slipped 91 cents, or 1.4 percent, to $68.81 in morning trading.

The Indianapolis company's stock jumped briefly last month after Lilly announced the first increase in about five years to the quarterly dividend it pays shareholders. The drugmaker bumped the dividend up a penny to 50 cents per share, or $2 annually.

The stock had climbed more than 35 percent last year. That more than tripled the 11.4 percent gain of the Standard & Poor's 500 index.

Lilly will report on its fourth quarter Jan. 30.

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