Elanco Animal Health Incorporated (NYSE:ELAN) delivered better-than-expected third-quarter financial results on strong demand and higher prices.
The animal health company reported quarterly adjusted earnings of 27 cents per share, beating the consensus estimate of 20 cents.
The company reported quarterly sales of $1.265 billion, up 11.3% year over year, beating the consensus estimate of $1.208 billion.
Segment Revenue Breakdown
Pet Health revenue was $608 million, an increase of 14%. The 5% price increase exceeded the company’s expectations.
The year-over-year reported increase was primarily driven by a 3% increase in price during the period and a 2% contribution from the AHV acquisition.
Executive Commentary On Pricing Power And Volume Growth
“…we saw strong veterinarian and pet owner demand for what we believe is ‘best medicine’ innovation for our ‘Big 6’ growth led by Zenrelia and Credelio Quattro. Price accelerated to 4% growth, exceeding our expectations, while volume remained robust at 5%. Our durable top-line is fueled by a significant runway for share gains off a small base in large, growing, global markets,” said Jeff Simmons, President and CEO of Elanco.
Price increased 4% in the quarter, led by global Pet Health at 5%, including strong sequential acceleration in U.S. Pet Health versus the second quarter, as Elanco’s differentiated innovation drives marketplace value.
Zenrelia And Credelio Quattro Expand Market Share And Clinic Penetration
Zenrelia achieved its largest revenue quarter ever, in both the U.S. and International, with September its largest month ever. The company, in its earnings call, said Zenrelia made its largest-ever quarterly contribution to total company revenue.
Simmons told investors that market demand drove U.S. sales to more than double in the quarter versus last year.
Vet clinic penetration climbed to approximately 19,000, or two-thirds of the total clinic base, with steady month-to-month gains even as new competition entered.
U.S. JAK market share increased 7 percentage points year over year, ending on a record high in September, driven by new users and sticky repeat orders and increased penetration in existing clinics.
The average U.S. sales per clinic increased 8% sequentially, even with new clinics and a competitive entrant.
Credelio Quattro U.S. share grew 9 points year-over-year; September was the largest sales month in the third quarter and its highest share month ever.
Raised Full-Year 2026 Guidance And Fourth-Quarter Financial Outlook
“Elanco is well positioned with momentum heading into 2027. We are recommitting to our annual algorithm of mid-single-digit organic constant currency revenue growth, high-single-digit adjusted EBITDA growth, and low-double-digit adjusted EPS growth…,” Simmons said on Friday.
Elanco Animal Health raised its fiscal 2026 adjusted earnings guidance from $1.10-$1.16 per share to $1.17-$1.20 per share, compared to the consensus of $1.13 per share.
The company also raised its 2026 sales outlook from $5.090 billion-$5.140 billion to $5.155 billion-$5.180 billion versus the Wall Street estimate of $5.132 billion.
The animal health company expects the fourth-quarter adjusted earnings of 16-19 cents vs. the 18 cents consensus estimate. Also, sales of $1.190 billion-$1.215 billion vs. a $1.193 billion consensus estimate.
ELAN Price Action: Elanco Animal Health shares were up 8.97% at $25.80 at the time of publication on Friday, according to Benzinga Pro data.
Photo by T Sxhneider via Shutterstock
