Elanco Animal Health Incorporated (ELAN) Accused of Misleading Shareholders
On March 24, 2020, Elanco withdrew its previously announced 2020 revenue and earnings per share guidance in light of the coronavirus pandemic. However, Elanco assured investors “the Company is closely monitoring distribution logistics” and that “at this time, Elanco is not experiencing any supply disruption.” Despite these assurances, on May 7, 2020, Elanco announced its first quarter 2020 results revealing revenue of $657.7 million and earnings per share of negative $0.12, reflecting “a reduction of approximately $60 million in channel inventory.” Elanco attributed the disappointing financial results to “distributor performance,” among other things and assured investors the Company would “tighten approach across many facets of distributor relationships.” On this news, Elanco’s share price fell over 13% to close at $19.88 per share.
