Merck Raises EPS Outlook After Q2 Earnings
Merck reported better-than-expected second-quarter 2016 results before markets opened Friday morning.
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Drug giant Merck & Co. Inc. (NYSE: MRK) reported second-quarter 2016 results before markets opened Friday. The company reported quarterly adjusted diluted earnings per share (EPS) of $0.93 and revenues of $9.84 billion. In the same period a year ago, Merck reported EPS of $0.86 on revenues of $9.79 billion. Second-quarter results also compare to the Thomson Reuters consensus estimates for EPS of $0.91 and $9.78 billion in revenues.
Pharmaceutical sales rose 2% year over year, irrespective of currency exchange effects. Net income on a GAAP basis totaled $1.21 billion, while non-GAAP net income totaled $687 million. Non-GAAP net income excludes the impacts of $1.12 billion in expenses related to acquisitions and divestitures, $18 million in marketing and administrative expenses, and $207 million in R&D costs.
In its financial outlook statement, Merck raised the lower end of its full-year adjusted EPS estimate from $3.60 to $3.67. The top end of the range rose from $3.75 to $3.77. Revenue guidance remained at $39.1 billion to $40.1 billion.
Consensus estimates for the third quarter call for EPS of $0.98 and revenues of $10.07 billion. For the full year, analysts are looking for EPS of $3.72 and revenues of $39.49 billion.
Chairman and CEO Kenneth C. Frazier said:
Our results this quarter reflect our strategic focus on key launches, including KEYTRUDA and ZEPATIER, as well as our priority inline programs. We remain committed to advancing our pipeline, delivering a balanced and differentiated portfolio, and achieving long-term, sustainable growth.
Since the beginning of the year, Merck stock trades up about 10.6%, well above the Dow Jones Industrial Average gain of 5.9%. Over the past 12 months, however, Merck stock trades down about 0.2%, compared with a Dow gain of 4%.
Shares of Merck’s stock traded up nearly 1.5% in Friday’s premarket, at $59.30 in a 52-week range of $45.69 to $60.07. Thomson Reuters had a 12-month price target of $61.90 before the report.
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Paul Ausick has been writing for 247Wallst.com for more than a decade. He has written extensively on investing in the energy, defense, and technology sectors. In a previous life, he wrote technical documentation and managed a marketing communications group in Silicon Valley.
He has a bachelor's degree in English from the University of Chicago and now lives in Montana, where he fishes for trout in the summer and stays inside during the winter.
