Eli Lilly Slashed Its Earnings Guidance and Its Stock Went Up 5% Anyway. What's Next?
It's rare for a business to warn investors that worse-than-expected earnings are coming without taking a hit to its share price, but in its third-quarter release on Nov. 2, Eli Lilly (NYSE: LLY) managed an even more uncommon feat. After management lowered its full-year earnings guidance, Lilly's shares jumped by 5%.
Due to the reasons for the downward revision, it probably won't do an encore performance. But that doesn't mean there's any bad news. On the contrary, Eli Lilly's stock is likely to continue marching upward.
While management sharply slashed the company's anticipated earnings per share (EPS), dialing the top of its guidance range down to $6.15 from $8.10 previously, its revenue forecast didn't change. Management still expects a top-line haul of as much as nearly $34 billion. But the culprit behind the downward revision isn't anything nefarious.
Source Fool.com
