Hurt by rising generic competition for its schizophrenia drug Zyprexa, Eli Lilly (LLY) reported a sharp decline in sales and adjusted earnings on Wednesday, though it reaffirmed its outlook for the full year.

The Indianapolis-based drug giant posted net income of $1.33 billion, or $1.18 a share, compared with a year-earlier profit $1.24 billion, or $1.11. The gains were led by a one-time charge from Amylin Pharmaceuticals (AMLN) that helped offset softer volumes.

Excluding the special items, though, Lilly said it earned 79 cents, down 30% from $1.13 in 2011, below average analyst estimates of 83 cents in a Thomson Reuters poll.

Revenue fell 11% to $5.44 billion from $6.14 billion a year ago and missed the Street’s view of $5.62 billion. The decline was fueled by a 9% drop in volumes related to Zyprexa and negative foreign exchange rates.

Zyprexa sales plunged 68% to $364.5 million.

Offsetting the slide was tighter operating expenses, which decreased 3% during the quarter, and a 16% jump to $1.24 billion in Cymbalta sales, its blockbuster depression drug. Cymbalta is expected to fall of the so-called “patent cliff” in December 2013.

Another strong performer during the quarter was Lilly’s cancer drug Alimta, which boosted sales by 2% to $643.6 million.

Lilly raised its fiscal 2012 earnings forecast to a range of $3.68 to $3.78 a share from an earlier $3.29 to $3.39. On an adjusted basis, it still sees earnings between $3.30 and $3.40.

The pharmaceutical company also reiterated its full-year sales forecast of $21.8 billion to $22.8 billion. The consensus is calling for non-GAAP earnings of $3.40 a share on sales of $22.72 billion.

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