In a press release dated May 7th, Elanco Animal Heatlh (ELAN) reported on the first quarter of fiscal 2021 ending March 31st.  For the period, the company posted a loss of $61 million on revenue of $1,242 million with a negative EPS of $(0.12).  For the corresponding quarter in FY2020, ELAN lost $49 million on sales of $658 million with a negative EPS of $(0.12).  The 88 percent increase in sales was due to the acquisition of the Bayer Animal Health business contributing to both companion animal and livestock sales.

In commenting on results, Jeff Simmons, CEO stated, "Elanco started the year with better-than-expected results building on the strong momentum our business has shown since closing the Bayer Animal Health acquisition".  He added, "today we are seeing the payoff from those choices and from disciplined execution that I believe sets Elanco on a path to be a global animal health leader".

Revenue from farm animal products increased 33 percent during Q1 attributed to Bayer Animal Health revenue of $174 million.  Legacy Elanco revenue declined by seven percent.

Guidance for FY2021 included increased revenue of $4.68 billion to $4.73 billion but with a net loss of $(170) to $(125).  EPS will range from $(0.35) to $(0.26).

ELAN has a market capitalization of $15.3 million.  The company has traded over the past 52-weeks in a range of $18.37 to $34.81 with a 50-day moving average of $30.14.

On a twelve-month trailing basis, operating margin was 0.4 percent and profit margin -17.1 percent.  The company achieved a return on assets of less than 0.1 percent and -8.0 percent on equity.

The performance of ELANCO should be compared with Zoetis. The two companies participate in the same market. They were both spin-offs from parent 'big-pharma' holding companies. One has prospered and the other has failed to justify pre-IPO projections. The difference lies in the ELANCO product range  (prior to the Bayer acquisition), inappropriate promotion and questionable management competence. ELANCO has demonstrated  a large number of departures from senior positions in recent years either through downsizing, attrition or resignation.