ELAN - Elanco reports Q2 earnings; narrows FY22 guidance and issues Q3 outlook

• Elanco press release ( NYSE: ELAN ): Q2 Non-GAAP EPS of $0.36 beats by $0.11 .
• Revenue of $1.18B (-7.8% Y/Y) in-line.
• Net leverage ratio decreased to 5.3x adjusted EBITDA; Reduction to ~5.0x adjusted EBITDA expected by year-end 2022.
• Updating FY 2022 guidance to reflect current assumptions related to economic, environmental and company-specific factors impacting the business, expecting: Revenue of $4,465 to $4,550 million (prior $4,700 to $4,755 million) vs. consensus of $4.68B; Reported diluted EPS of $(0.10) to $(0.03) (prior $0.02 to $0.09) , Adjusted EPS of $1.06 to $1.13 (prior $1.15 to $1.21) vs. consensus of $1.14; Reported Net Loss of $(48) to $(15) million, Adjusted EBITDA of $1,060 to $1,100 million.
• Providing financial guidance for the third quarter 2022, expecting: Revenue of $1,010 to $1,060 million vs. consensus of $1.14B; Reported diluted EPS of $(0.12) to $(0.06), Adjusted EPS of $0.12 to $0.18 vs. consensus of $0.27; Reported Net Loss of $(61) to $(32) million, Adjusted EBITDA of $175 to $215 million.
• Remain committed to achieve 60% adjusted gross margin and 31% adjusted EBITDA margin targets

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