Drugmakers Merck, Pfizer Eke Out Profit Hikes

Pfizer Inc. (NYSE: PFE) reported also second-quarter 2014 results before markets opened Monday. The company posted EPS of $0.58 and revenues of $12.77 billion. A year ago, Pfizer reported quarterly EPS of $0.56 on revenues of $12.97 billion. Second-quarter results compare to the consensus estimates for EPS of $0.57 and $12.46 billion in revenues.

Pfizer’s sales were down 2%, which the company said was due to an operational decline of $113 million and an unfavorable currency exchange rate loss of $87 million. Pfizer also gave up on its attempts to acquire British drug maker AstraZeneca PLC (NYSE: AZN).

Sales of Merck’s allergy drug Nasonex were down 21% as the loss of market exclusivity continues to hurt the top line. Merck’s best-selling pharmaceuticals were anti-inflammatory drug Remicade, with sales up 15% to $607 million, and diabetes treatment Januvia/Janumet, with revenues up 2% to $1.58 billion for the quarter.

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Gross margin at Merck dropped sharply from 61.1% in the year-ago quarter to 55.2%, primarily due to restructuring charges and acquisition/divestiture costs.

Merck  raised its forecast for full-year 2014 adjusted EPS, increasing the low end of the range from $3.35 to $3.43 and leaving the high end at $3.53. The consensus estimate for this year’s EPS is $3.48. Full-year revenues continue to be forecast at $42.4 billion to $43.2 billion, while the current consensus estimate is $42.56 billion.

Pfizer lower 2014 revenue guidance from a previous range of $49.2 billion to $51.2 billion to a new range of $48.7 billion to $50.7 billion. The adjusted EPS estimate remained unchanged at $2.20 to $2.30.

Since the beginning of the year Merck’s stock is up 15.8%, while Pfizer’s share price is down nearly 2%. For the past 12 months, Merck shares are up nearly 20% compared with about 2.5% for Pfizer.

Shares of Merck’s stock traded about 1% higher in Tuesday’s premarket, at $58.55 in a 52-week range of $44.62 to $59.84. Thomson Reuters had a consensus analyst price target of around $61.00 before the report.

Pfizer shares were trading up about 1%, at $30.50 in a 52-week range of $27.76 to $32.96. Thomson Reuters had a consensus analyst price target of around $34.50 before its report.

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