KENILWORTH (NJ) (dpa-AFX) - Biopharmaceutical company Merck & Co., Inc. (MRK) reported Thursday a net profit for the first quarter that grew 7 percent from last year, primarily reflecting improved gross margins and lower restructuring costs, despite a 2 percent sales drop and negative foreign exchange impact.
Adjusted earnings per share topped analysts' estimates, while quarterly sales missed it. The company also trimmed its adjusted earnings guidance for the full-year 2025, but backed annual sales outlook.
In pre-market activity on the NYSE, MRK shares are trading at $79.60, up $0.86 or 1.09 percent.
'Our company made strong progress to start the year, with increasing contributions from our newer commercialized medicines and vaccines and continued advancement of our pipeline,' said Robert Davis, chairman and CEO.
For the first quarter, the company reported net income attributable to the company of $5.08 billion or $2.01 per share, up 7 percent from $4.76 billion or $1.87 per share in the prior-year quarter. Net income grew 12 percent in constant currency.
The latest quarter results include a charge of $0.26 per share related to the the acquisition of Harpoon Therapeutics, Inc.
Excluding items, adjusted earnings for the quarter was $2.22 per share, compared to $2.07 per share in the year-ago quarter.
On average, 13 analysts polled expected the company to report earnings of $2.11 per share for the quarter. Analysts' estimates typically exclude special items.
Worldwide total sales for the quarter decreased 2 percent or up 1 percent in constant currency, to $15.53 billion from $15.78 billion in the same quarter last year, driven by declines in vaccines, virology and immunology, partially offset by growth in oncology, cardiology and diabetes. Analysts expected revenues of $15.91 billion for the quarter.
Excluding the Impact of Foreign Exchange, total sales increased 1 percent.
Pharmaceutical sales decreased 3 percent or up 1 percent in constant currency, to $13.64 billion, with GARDASIL / GARDASIL 9 sales declining 41 percent to $1.33 billion, due to lower demand in China, while KEYTRUDA sales grew 4 percent or 6 percent in constant currency, to $7.21 billion and JANUVIA / JANUMET sales improved 19 percent or 21 percent in constant currency, to $487 million from last year.
Animal Health sales increased 5 percent or 10 percent in constant currency, to $1.59 billion from last year, primarily driven by higher demand for Livestock products, as well as inclusion of sales from Elanco aqua business that was acquired in July 2024.
Gross margin for the quarter improved 40 basis points to 78.0 percent, primarily due to the favorable impact of product mix and lower restructuring costs, partially offset by higher amortization of intangible assets and the unfavorable impact of foreign exchange.
Looking ahead to fiscal 2025, Merck now projects adjusted earnings in a range of $8.82 to $8.97 per share, lower than the prior guidance range of $8.88 to $9.03 per share. Sales are still expected between $64.1 billion and $65.6 billion.
On average, 23 analysts polled expect the company to report earnings of $8.94 per share on sales of $65.01 billion for the year. Analysts' estimates typically exclude special items.
The Street is looking for earnings of $8.94 per share on sales of $65.01 billion for the year.
The company said the outlook is revised to reflect the negative impact from anticipated one-time charge of approximately $0.06 per share related to license agreement with Hengrui Pharma. The outlook also absorbs an estimated $200 million of additional costs for tariffs implemented to date.
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