Eli Lilly's Earnings Miss: Should Investors Be Concerned?

Eli Lilly and Company (LLY) recently reported its third-quarter 2024 financial results, which fell short of analyst expectations. The pharmaceutical giant's stock price dropped by more than 10% following the earnings miss, raising concerns among investors. This article will analyze the reasons behind Eli Lilly's earnings miss and assess whether investors should be worried about the company's future prospects.

Eli Lilly's revenue grew by 20% to $11.44 billion in the third quarter, but this was below the expected $12.11 billion. Adjusted earnings per share (EPS) of $1.18 also missed the anticipated $1.47. The company attributed the shortfall to inventory management issues and acquisition-related charges.

Inventory and supply issues have been a persistent problem for Eli Lilly, particularly with its high-demand diabetes and weight loss treatments, Mounjaro and Zepbound. As wholesalers used up their existing inventory without ordering more, supply shortages occurred, impacting sales. The company is addressing these issues by expanding its manufacturing capacity, including a $1.8 billion investment in Ireland, to meet the high demand for these drugs.

Acquisition-related charges also contributed to Eli Lilly's earnings miss. The company recorded a $2.8 billion charge during the third quarter, primarily due to its acquisition of Morphic Holding. This charge significantly impacted the company's earnings guidance, with adjusted EPS now projected to fall within a range of $13.02 and $13.52, down from the previous forecast of $16.10 to $16.60.

Despite the earnings miss, Eli Lilly's long-term potential remains intact. The company's diabetes and weight loss treatments, Mounjaro and Zepbound, have shown strong demand and are expected to generate billions in revenue for years to come. Additionally, Eli Lilly's pipeline includes promising candidates, such as tirzepatide, donanemab, imlunestrant, and lebrikizumab, which could further drive growth.

Investors should not be overly concerned about Eli Lilly's earnings miss, as it appears to be a short-term issue. The company's long-term growth prospects remain strong, and its efforts to address inventory and supply issues should help mitigate future earnings misses. However, investors should monitor the situation closely and remain vigilant about any potential changes in the company's financial outlook.


In conclusion, Eli Lilly's earnings miss in the third quarter of 2024 was primarily due to inventory management issues and acquisition-related charges. While investors may be concerned about the short-term impact on the company's financial performance, Eli Lilly's long-term growth prospects remain strong. The company is taking steps to address its inventory and supply issues, and its pipeline of promising candidates should help drive future growth. Investors should remain vigilant and monitor the situation closely, but there is no need to panic about Eli Lilly's earnings miss.