Merck & Company, Inc. (NYSE: MRK) is trading up after its earnings report. With a high dividend yield of 4.4%, many investors are watching this despite a stance of little to no real growth coming from the Big Pharma giant. As expected, the no growth stance remains in place for the year ahead.
Net income was $1.51 billion, or $0.49 in earnings per share; on an adjusted basis the figures were $2.98 billion in income and $0.97 EPS. We had estimates of $0.95 EPS for the adjusted figure. Revenue was up 1.6% to $12.29 billion and that was a bit shy of the $12.52 billion expected. Merck’s total pharmaceutical sales were up about 3% to $10.76 billion
As far as guidance, Merck gave a projected 2012 earnings range of $3.75 to $3.85 in earnings per share and the consensus estimate is $3.83 per share.
The only real driving force today is the higher dividend, which jumped to $0.42 at the last payment. That was the first such dividend hike since all the way back to 2004.
Maybe investors are pleased that generics are not killing brand drugs as much as feared. The stock is actually up 1.4% at $39.18 in the pre-market and investors need to remember that the 52-week high is $39.43 right now.
JON C. OGG