Elanco's earnings exceeded expectations but the stock declined slightly due to profit margin concerns

LootboxPhobia · 2026-02-24T12:32:44+00:00

Elanco Animal Health announced its Q4 results, with an adjusted EPS of $0.13 and revenue of $1.14 billion, both exceeding expectations. However, due to shrinking profit margins, the stock price declined in pre-market trading. The company’s guidance for fiscal year 2026 is in line with market expectations, with growth in both the pet and farm animal segments.

LootboxPhobia

2026-02-24 12:32:44

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Indianapolis - On Tuesday, Elanco Animal Health Incorporated (NYSE: ELAN) announced its fourth-quarter results that exceeded analyst expectations.

Following the announcement, the company’s stock fell 1.17% in pre-market trading as investors focused on margin compression.

The animal health company’s adjusted fourth-quarter earnings per share were $0.13, surpassing the market consensus of $0.11.

Revenue reached $1.14 billion, exceeding analysts’ expectations of $1.09 billion, representing a 12% increase on a reported basis and a 9% increase on an organic constant currency basis compared to the same period last year. Revenue grew 12% year-over-year from $1.02 billion in Q4 2024.

However, despite a 7% increase in adjusted EBITDA to $189 million, the adjusted EBITDA profit margin contracted from 17.4% last year to 16.7%. Although both revenue and earnings beat expectations, margin pressures seem to have impacted investor sentiment.

“Elanco has made significant progress in strategic areas such as growth, innovation, and cash flow for 2025,” said President and CEO Jeff Simmons. “Our strong Q4 performance, with 9% organic constant currency revenue growth, marks our tenth consecutive quarter of fundamental growth.”

For fiscal year 2026, Elanco issued an adjusted earnings per share guidance of $1.00 to $1.06, with a midpoint of $1.03, in line with analyst expectations. The company expects revenue of $4.95 billion to $5.02 billion, with a midpoint of $4.99 billion, slightly above the market consensus of $4.94 billion.

Pet health revenue grew 11% to $489 million, driven by new products including Credelio Quattro and Zenrelia. Livestock business revenue increased 12% to $640 million, mainly supported by strong sales of U.S. beef product Experior and poultry.

The company raised its 2026 revenue target for innovative products from $1.1 billion to $1.15 billion and aims to achieve a net leverage ratio of 3.6 times adjusted EBITDA by the end of 2025.

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