Merck & Co.'s (MRK) first-quarter earnings rose 67% as the drug maker's cost controls helped offset slower-than-expected sales growth.
Merck, like its rivals, has been cutting costs as part of an effort to soften the hit from increased generic competition. The company's top-selling allergy and asthma medication Singulair loses patent exclusivity in August and the ripple-effect from generic versions of rival Pfizer Inc.'s (PFE) cholesterol fighter Lipitor have contributed to a decline in sales of Merck's anticholesterol drug Vytorin.
Merck has said it expects to seek regulatory approval for five new products this year and in 2013, including potential treatments for osteoporosis, insomnia and a next-generation vaccine against a cancer-causing virus. The drug maker also has been focusing on areas such as hepatitis C and diabetes.
Merck reported a profit of $1.74 billion, or 56 cents a share, up from $1.04 billion, or 34 cents, a year earlier. Excluding items such as acquisition-related and restructuring costs, earnings rose to 99 cents from 92 cents. Its March projection was earnings of 95 cents to 98 cents a share, below analysts' expectations at the time.
Sales rose 1.3% to $11.73 billion, missing the $11.82 billion forecast from analysts polled by Thomson Reuters.
Operating margin rose to 21.4% from 14.9%, reflecting a 14% drop in research and development costs.
Pharmaceutical sales grew 2.7% to $10.08 billion. Singulair sales edged up 0.9%, while sales of Vytorin declined 8%.
The animal-health business, which includes products for farm animals and pets, posted a 8.3% revenue increase. Sales in the consumer division--which includes over-the-counter allergy medicine Claritin and Coppertone skin-care products--rose 7.2%.
Shares closed Thursday at $38.47 and were inactive premarket. The stock is up 2% so far this year.
-By Melodie Warner, Dow Jones Newswires; 212-416-2283; email@example.com