Are Merck Earnings Enough?

Health and Healthcare

Published: July 28, 2015 9:55 am

Last Updated: April 27, 2020 4:32 pm

Merck & Co. Inc. (NYSE: MRK) reported its second-quarter financial results Tuesday before the markets opened. The pharmaceutical giant had $0.86 in earnings per share (EPS) on $9.8 billion in revenue compared to Thomson Reuters consensus estimates of $0.81 in EPS on $9.80 billion in revenue. The same period from the previous year had $0.85 in EPS on $10.93 billion in revenue.

The company raised guidance for the 2015 full year; Merck expects EPS to be in the range of $3.45 to $3.55 and that revenues will be in the range of $38.6 billion to $39.8 billion. There are consensus estimates of $3.45 in EPS on $39.73 billion in revenue.

In terms of the product sales the company reported (in comparison to the same period of the previous year):

Januvia/Janumet had sales of $1.60 billion, up 1%.
Zetia/Vytorin had sales of $955 million, down 16%.
Remicade had sales of $455 million, down 25%.
Gardasil/Gardasil 9 had sales of $427 million, up 4%.
Isentress had sales of $375 million, down 17%.
Proquad, M-M-R 2 and Varivax had sales of $358 million, down 10%.
Cubicin had sales of $293.

Kenneth C. Frazier, Chairman and CEO of Merck, commented on the earnings:

We’re investing resources to grow our strongest brands and to support the most promising assets in our pipeline, while at the same time lowering our cost base and delivering operating leverage.

We’ve made significant progress this quarter in two of our most important assets, the KEYTRUDA and hepatitis C programs, and will be fully prepared to take advantage of these potentially breakthrough opportunities.

We’re witnessing the introduction of breakthrough therapies for some of the most difficult-to-treat diseases. Merck’s late-stage pipeline and ongoing launches reflect scientific and therapeutic progress with the potential to provide significant value to patients and society.

Shares of Merck closed Monday down 0.7% at $56.99. Following the release of the earnings report, the initial response in the premarket was positive and shares were up 0.5% at $57.25. The stock has a consensus analyst price target of $65.47 and a 52-week trading range of $52.49 to $63.62.

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