Eli Lilly & Co (NYSE:LLY - News) reported higher-than-expected quarterly profit on Monday as it controlled costs and revalued overseas inventory because of the stronger dollar. Earnings reached $1.31 billion, or $1.20 a share, from $1.06 billion, or 97 cents, in the year-earlier period.
Sales of Lilly's biggest product, schizophrenia treatment Zyprexa, were flat, but several of its other big medicines posted strong gains, including depression drug Cymbalta, which jumped 17 percent to $709 million.
The inventory valuations improved the cost of sales, boosting profit margins by 6.9 percentage points to 83.8 percent.
"We don't necessarily expect that level of gross margin improvement throughout the year," company spokesman Mark Taylor said.
U.S. revenue jumped 13% to $2.87 billion, while foreign revenue slid 4% to $2.18 billion due to a higher U.S. dollar.As opposed to many of its Big Pharma peers, most of Lilly's sales are made in the U.S. According to J.P. Morgan, about 46% of Lilly's 2008 sales came from overseas.
Lilly also reconfirmed its 2009 financial forecast of earnings per share between $4.00 and $4.25.Lilly shares were up over 3% at $34.91 in pre-market trading.
Disclosure I own shares of LLY.