Shares of Eli Lilly & Co. (NYSE: LLY) are tanking after the drugmaker reported worse-than-expected first quarter earnings.

Net income more than doubled to $1.06 billion, or 97 cents a share, as sales of Cialis and Cymbalta climbed. Revenue rose 14% to $4.81 billion from $4.23 billion. Excluding one-time items profit was 92 cents, below the 96-average estimate of analysts surveyed by Thomson Financial. Revenue was expected at $4.83 billion. Thanks to a lower tax rate, company raised its 2008 forecast to $3.90 to $4.05, from $3.73 to $3.90.

"Following strong performance in 2007, Lilly continued to deliver solid financial results in the first quarter of 2008," commented John Lechleiter, the company's new chief executive officer, said in the earnings release. "Double-digit sales growth was once again primarily driven by volume. ...We also made appropriate investments in R&D to accelerate the progress of our mid-stage pipeline, resulting in six molecules advancing to the next stage on clinical development this past quarter, while at the same time delivering strong earnings per share growth for the quarter."

The earnings miss was due to a larger-than-expected charge for halting development of the AIR insulin inhaler. The $145.7 million, or 9 cents a share, was at least $25.7 million more than the Indianapolis-based company estimated when it abandoned the drug last month, according to Bloomberg.

Miller Tabak analyst Les Funleyder told the news service that "In the near term, our earnings picture isn't that bad for Lilly, but they have a Zyprexa problem. It is going off patent soon and Risperdal is going off patent in the second half of this year.''

Shares of Lilly fell $2.29, or 4.4%, to $49.78 in early trading.