Merck Raises Guidance
November 15 2016 - 3:30AM
Dow Jones News
FRANKFURT—German pharmaceuticals and chemicals company Merck
KGaA on Tuesday reported a near 26% rise in profit for the third
quarter and raised its guidance for the full year because of growth
at the life science and health-care businesses.
Net profit for the period ended Sept. 30 was €457 million
($491.4 million), compared with €364 million a year earlier,
boosted by the company's recent acquisition of U.S. laboratory
equipment maker Sigma-Aldrich, which closed in November 2015.
Merck said it now expects earnings before interest, taxes,
depreciation and amortization, Ebitda, before one-time items for
2016, of between €4.45 billion and €4.6 billion, up from a previous
expectation for €4.25 billion to €4.4 billion.
The improved outlook reflects higher profitability at the
health-care unit, in part due to the release of around €40 million
in provisions for research projects in the quarter, the company
said.
Quarterly sales rose by 19% to €3.72 billion, driven by the
Sigma-Aldrich acquisition.
The company's closely-watched Ebitda before one-time items rose
by 24%, to €1.17 billion, driven by Sigma-Aldrich and the
health-care business, slightly beating analysts' forecasts.
Analysts had predicted Ebitda before one-time items of €1.12
billion, according to a recent poll conducted by The Wall Street
Journal.
Merck "reported again a solid set of figures" above
expectations, Peter Spengler, an analyst at DZ Bank, wrote in a
note Tuesday morning.
The $17-billion Sigma-Aldrich transaction, first announced in
2014, has been a primary driver of growth at Merck in recent
quarters. Sigma-Aldrich has been integrated into the company's life
science division.
The deal was part of a drive by the company to strengthen its
presence in the U.S. market and expand beyond its traditional
pharmaceuticals division, which has struggled to bring new
lucrative drugs to market in recent years.
Merck has also expanded its specialty chemicals business, which
is a world leader in the production of liquid crystals that are
used in display screens.
The company isn't affiliated with U.S.-based Merck & Co.
Write to Christopher Alessi at christopher.alessi@wsj.com
(END) Dow Jones Newswires
November 15, 2016 03:15 ET (08:15 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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