Merck Q2 Profit Beats Estimates

Merck & Co., Inc. MRK reported upbeat earnings for the second quarter on Tuesday. The Kenilworth, New Jersey-based company posted a quarterly net profit of $687 million, or $0.24 per share, compared to $2 billion, or $0.68 per share, in the year-ago period. Excluding non-recurring items, the company's adjusted earnings came in at $0.86 per share. Its revenue slipped 11 percent to $9.79 billion. However, analysts were estimating a profit of $0.81 per share or on revenue of $9.81 billion. The average estimate among 39 Estimize users was for earnings of $0.81 per share and revenue of $9.74 billion. Merck's pharmaceutical sales dropped 6 percent to $8.6 billion in the quarter, while animal health sales fell 4 percent to $840 million for the second quarter. The gross margin widened to 61.6 percent for the second quarter, from 55.2 percent in the year-ago quarter. Research and development expenses, on a non-GAAP basis, fell 2 percent to $1.6 billion in the second quarter. Chairman and Chief Executive Officer Kenneth C. Frazier said, "We're investing resources to grow our strongest brands and to support the most promising assets in our pipeline, while at the same time lowering our cost base and delivering operating leverage…We've made significant progress this quarter in two of our most important assets, the KEYTRUDA and hepatitis C programs, and will be fully prepared to take advantage of these potentially breakthrough opportunities." For the full-year 2015, the company lifted its adjusted earnings forecast to $3.45 to $3.55 per share. Merck shares fell 0.70 percent to close at $57.01 yesterday.