How did LLY's Q4 2024 earnings surprise investors?

**Eli Lilly's Q4 2024 earnings fell short of investor expectations**, as evidenced by the company's decision to trim its 2024 financial forecast after initially raising it. Here are the key points that highlight the earnings surprise and its implications: 1. **Revenue and Earnings Miss**: Lilly's Q4 2024 earnings per share (EPS) were $1.18, missing the consensus estimate of $1.52. This represents a significant year-over-year drop, with Q3 2023 EPS being $0.10. The revenue for the quarter was $11.44 billion, which is a 20% increase, but it fell short of the expected $12.09 billion. 2. **Guidance Adjustment**: The company had previously raised its 2024 revenue guidance to $45.4 billion to $46 billion, anticipating a 50% growth in Q4. However, the actual performance did not meet these expectations. This led to a revision of the guidance, with the new forecast sitting below the previous projection. 3. **Stock Reaction**: Following the earnings release, Lilly's shares experienced a significant drop, reflecting investor disappointment. The stock price fell by approximately 11% to $805. 4. **Analyst Concerns**: Analysts are now scrutinizing whether the decline in key drugs Mounjaro and Zepbound's sales is a temporary fluctuation or a new trend. These drugs accounted for a substantial portion of the company's growth, and their subdued performance in Q4 has contributed to the overall earnings shortfall. In conclusion, Eli Lilly's Q4 2024 earnings failed to meet investor expectations, primarily due to weaker-than-anticipated sales from key drugs and higher expenses. This has led to a downward adjustment in the company's full-year earnings guidance and a negative sentiment among investors, as reflected in the stock price movement.