Merck Increases Revenue Guidance as Second-Quarter Sales Grow 12%--Update
July 30 2019 - 10:28AM
Dow Jones News
By Allison Prang
Merck & Co. Inc. raised its expectations for revenue and
adjusted earnings for the year as sales and earnings at the
pharmaceutical company rose in the second quarter.
Merck's profit was $2.67 billion, up 56% from the comparable
quarter a year prior, as sales climbed and restructuring costs
fell.
Adjusted earnings were $1.30 a share. Analysts polled by FactSet
were expecting adjusted earnings of $1.16 a share.
Sales rose 12% to $11.76 billion. Analysts were expecting $10.96
billion. The company said sales of cancer treatment Keytruda rose
58%.
The company has been trying to find deals to grow its
cancer-treatment offerings. It announced in May it was buying
Peloton Therapeutics Inc. and in June said it agreed to buy Tilos
Therapeutics Inc., which works partly on cancer treatment.
The company said it now expects revenue to be between $45.2
billion and $46.2 billion for the fiscal year. In April, it said it
was expecting between $43.9 billion and $45.1 billion. Analysts are
expecting $44.71 billion.
The company said it expects to book a $1.1 billion charge
related to its Peloton acquisition. As a result, Merck is now
expecting earnings per share in the range of $3.78 to $3.88. It had
previously guided for earnings per share of $4.02 and $4.14.
However, it raised its outlook for adjusted earnings. Merck is
now expecting adjusted earnings per share to be between $4.84 and
$4.94. It had been expecting between $4.67 a share and $4.79 a
share. Analysts are expecting $4.75 a share.
Shares rose 2.1% Tuesday morning.
The company also said Tuesday it expects operating expenses for
the fiscal year to increase by a low-single-digit rate compared
with the prior year. It had previously said it was expecting those
to fall year over year by a mid-single-digit rate.
In the second quarter, the company's research-and-development
expenses declined and its restructuring costs fell 74% to $59
million. The company also reported $140 million in net other
expense, which it said was because of lower income from investments
in equity securities and impairment charges.
Write to Allison Prang at allison.prang@wsj.com
(END) Dow Jones Newswires
July 30, 2019 10:13 ET (14:13 GMT)
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