Elanco Animal Health (NYSE:ELAN) reported first-quarter results on Wednesday that exceeded Wall Street expectations, prompting the stock to rise more than 6% in premarket trading as the company lifted guidance across several key financial metrics.
The animal health group posted adjusted earnings of $0.40 per share, beating analyst forecasts of $0.34 by $0.06.
Revenue came in at $1.37 billion, ahead of consensus estimates of $1.28 billion and up 15% from the same period last year. On an organic constant-currency basis, sales increased 10% year over year.
Innovation strategy continues to drive growth
“Elanco’s strong first quarter results demonstrate the significant momentum of our innovation-led strategy,” said Jeff Simmons, president and chief executive officer of the company.
“Organic constant currency revenue growth of 10% reflects outperformance across our diverse portfolio, including Zenrelia reaching trailing 4-quarter blockbuster status, and Credelio Quattro achieving accelerating market share gains.”
Pet Health and Farm Animal divisions post double-digit growth
Revenue from Elanco’s Pet Health business increased 12% to $710 million during the quarter.
Meanwhile, the Farm Animal segment recorded revenue growth of 18%, reaching $642 million.
Adjusted EBITDA rose 21% to $334 million, while the adjusted EBITDA margin improved to 24.5% from 23.1% in the prior-year quarter.
Company raises 2026 guidance
Elanco increased its adjusted earnings-per-share guidance for fiscal 2026 to a range of $1.03 to $1.09, compared with its previous forecast of $1.00 to $1.06.
The midpoint of the updated range aligns with analyst consensus estimates.
The company also lifted its full-year revenue outlook to between $5.01 billion and $5.09 billion, up from prior guidance of $4.95 billion to $5.02 billion.
The midpoint of the revised forecast exceeded Wall Street expectations of approximately $5 billion.
Leverage target improves as outlook strengthens
Elanco also improved its year-end net leverage ratio target to between 3.0x and 3.2x adjusted EBITDA.
For the second quarter, the company expects revenue in the range of $1.30 billion to $1.33 billion and adjusted earnings per share of $0.25 to $0.28.