Elanco Animal Health Inc. reported its financial results for the third quarter and the nine months ended September 30, 2024, showing significant improvements in profitability compared to the same periods in 2023. For Q3 2024, the company generated revenue of $1,030 million, a decrease of 4% from $1,068 million in Q3 2023. However, for the nine months ended September 30, 2024, revenue increased by 1% to $3,419 million, compared to $3,382 million in the prior year.

The company reported a net income of $364 million for Q3 2024, a substantial recovery from a net loss of $(1,096) million in Q3 2023. For the nine-month period, net income was $346 million, compared to a net loss of $(1,090) million in the same period last year. This turnaround was attributed to improved operational efficiency and strategic divestitures, particularly the sale of its aqua business, which closed on July 9, 2024, for $1,294 million. The divestiture resulted in a pre-tax gain of $640 million, significantly bolstering the company's financial position.

Elanco's income before income taxes for Q3 2024 was $559 million, compared to a loss of $(1,097) million in Q3 2023. The nine-month income before taxes also improved to $539 million from a loss of $(1,068) million in the previous year. The effective tax rate for Q3 2024 was 34.8%, influenced by the taxable gain from the aqua business divestiture.

In terms of cash flow, Elanco reported net cash provided by operating activities of $364 million for the nine months ended September 30, 2024, up from $114 million in the same period in 2023. The company also experienced a significant increase in cash and cash equivalents, totaling $490 million as of September 30, 2024, compared to $369 million at the end of the same period in 2023.

Strategically, Elanco made notable acquisitions, including NutriQuest for $59 million in January 2023 and NutriQuest Brazil for $19 million in August 2023, aimed at enhancing its nutritional health offerings. The company also implemented a restructuring plan in February 2024, reallocating resources from farm animal to pet health, which is expected to yield annualized savings of $30 to $35 million.

Despite these positive developments, Elanco faces ongoing challenges, including global macroeconomic pressures and potential supply chain disruptions. The company is actively working to mitigate these risks while continuing to invest in its product portfolio, which includes recent FDA approvals for several new products.