Earnings Report Interpretation of Eli Lilly 2024Q1: Revenue fell short of expectations, profits increased significantly, and the weight-loss drug market continues to be hot

On Tuesday, April 30, before the U.S. stock market opened, Eli Lilly released its Q1 2024 earnings report, reporting revenue of $8.768 billion, up 26% year-over-year, slightly below market expectations of $8.93 billion. $Eli Lilly(LLY.US) $Novo Nordisk AS(NVO.US) $Dow Jones Industrial Average(.DJI.US) $S&P 500(.SPX.US) $Hang Seng Index(00HSI.HK) $NASDAQ Composite Index(.IXIC.US) $Invesco QQQ Trust(QQQ.US)

1. Summary of Personal Views

1. Eli Lilly's weight-loss drugs remain hot sellers, though this quarter's revenue was slightly weaker than expected. However, the improvement in gross margin drove significant profit growth.

2. Leveraging its years of R&D expertise, Eli Lilly has gained a clear advantage in the weight-loss drug market, with market enthusiasm expected to continue into 2024. Seizing the momentum, the company has further raised its full-year 2024 earnings guidance.

3. Eli Lilly's stock performance has been exceptionally strong, repeatedly hitting new highs in 2023 and continuing its upward trend in Q1 2024. While the overall risk is evident, investors must make their own decisions.

Overall, Eli Lilly's weight-loss drug market remains red-hot. Despite slightly missing revenue expectations this quarter, the improved gross margin significantly boosted profits. The company's long-standing R&D strength has secured it a dominant position in the weight-loss drug market, with sustained market enthusiasm expected through 2024. Consequently, Eli Lilly has raised its full-year 2024 guidance, reflecting optimism about future growth. However, with its stock repeatedly hitting record highs in 2023 and continuing to perform strongly in Q1 2024, investors should carefully assess risks and make independent decisions.

2. Financial Analysis: Revenue Falls Short, Profits Surge

Revenue reached $8.768 billion, up 26% year-over-year but slightly below the expected $8.93 billion. Core weight-loss drug Mounjaro (tirzepatide) and the newly launched Zepbound continued strong sales growth, driving overall performance.

Net profit for Q1 was $2.243 billion, up 66.77% year-over-year, with EPS at $2.48, up 66%, slightly beating expectations of $2.44. On a non-GAAP basis, adjusted net profit was $2.335 billion, up 60%, with EPS at $2.58. Improved product margins and cost optimization were key drivers of profit growth.

3. Operational Insights: Cost Efficiency, Weight-Loss Drug Momentum, and Raised Guidance

1. Significant Cost Efficiency

This quarter, Eli Lilly demonstrated stronger cost control, achieving notable improvements in efficiency. Sales costs grew just 3%, far below revenue growth, driving gross margin up from 76.63% to 80.91% year-over-year.

Operating expenses also showed disciplined management. While R&D spending rose 27% to maintain innovation leadership, marketing and administrative expenses grew only 12%, well below revenue growth. This contributed to a 68% surge in operating profit to $2.509 billion, outperforming revenue growth.

2. Weight-Loss Drugs Still Hot

Eli Lilly's weight-loss drugs have been a major topic since their launch. Mounjaro surpassed $5 billion in 2023 sales but fell short of expectations this quarter at $1.807 billion. Meanwhile, newly launched Zepbound outperformed with $517 million in sales, far exceeding forecasts.

To meet demand, Eli Lilly is expanding production capacity, expecting significant output increases in H2 2024.

3. Raised Full-Year Guidance

Eli Lilly raised its 2024 revenue guidance to $42.4–$43.6 billion (from $40.4–$41.6 billion) and EPS to $13.05–$13.55 (up $1.25), reflecting confidence in GLP-1 drug demand and production expansion.

This is a personal earnings analysis based on my research. Feedback is welcome. This does not constitute investment advice—please make independent decisions.