Eli Lilly's Q2 Earnings Disappoint: Share Price Takes a Hit

Eli Lilly's share price dropped 14% on August 7 after the company announced a 14% decline in second-quarter revenue, driven by a 6% decrease in pharmaceutical sales. Despite this setback, analysts believe the decline is not a signal to buy, citing ongoing challenges in the pharmaceutical industry and competition from generic drugs.

Eli Lilly and Company (NYSE: LLY) announced its second-quarter 2025 financial results on August 7, revealing a 38% year-over-year (YoY) increase in revenue to $15.56 billion. However, the company's share price dropped 14% following the announcement, driven by a 14% decline in second-quarter revenue, primarily attributed to a 6% decrease in pharmaceutical sales. The decline in revenue was partially offset by a 42% increase in volume, but lower realized prices contributed to the overall revenue decrease.

Key highlights from the quarter include a 92% increase in reported earnings per share (EPS) to $6.29 and a 61% increase in non-GAAP EPS to $6.31. The company also raised its 2025 full-year revenue guidance to the range of $60 billion to $62 billion, an increase of $1.5 billion from its previous guidance. Additionally, Lilly reported positive study results in orforglipron for obesity, Mounjaro SURPASS CVOT for type 2 diabetes and heart disease, and Jaypirca H2H vs Imbruvica in CLL/SLL, highlighting the progress in its pipeline.

Despite the strong financial performance, analysts remain cautious. The pharmaceutical industry continues to face challenges, including competition from generic drugs and regulatory hurdles. The decline in pharmaceutical sales, coupled with ongoing industry challenges, has led analysts to advise against buying Eli Lilly shares at this time.

References:
[1] https://investor.lilly.com/news-releases/news-release-details/lilly-reports-second-quarter-2025-financial-results-and-raises