Why did LLY's Q3 2024 earnings fall short?

Eli Lilly and Company (LLY) experienced a slight decline in its Q3 2024 earnings, with the diluted EPS coming in at $1.07, which was a deviation from the expected EPS of $1.34, this resulted in an EPS surprise of -0.27. The total revenue for the quarter was $11.44 billion, which was slightly below the anticipated revenue of $11.5 billion.

The company's earnings fell short due to the following reasons:

1. International Market Challenges: Although Lilly's international revenue streams are significant, they pose challenges, particularly in terms of currency fluctuations and market behaviors. For instance, the company's revenue from China was lower than expected, with $395 million recorded in the latest quarter, compared to the anticipated $402.64 million.
2. Market Dynamics and Competition: The pharmaceutical market is highly competitive, and Lilly faces competition from other drug manufacturers. This competition can impact its sales and market share, thereby affecting its earnings.

In summary, Eli Lilly's Q3 2024 earnings fell short due to a combination of lower-than-expected revenue from key markets like China, and competitive dynamics in the pharmaceutical sector.