Merck weighed down by charges, but drug sales rebound
Merck’s second-quarter profit dove 49%, mainly due to a big charge for an acquisition and a higher tax rate, even as sales of its vaccines and medicines used in hospitals rebounded from the effects of the pandemic. The company narrowly missed Wall Street’s profit expectations, and Merck shares fell slightly in early trading.
The maker of cancer blockbuster Keytruda said it believes patients and health care systems have now “largely adapted to the impacts of COVID-19” and the pandemic should only reduce its 2021 revenue by less than 3%.
The drug giant slimmed down a bit with a June 2 spinoff that combined its Organon women’s health unit with its businesses selling biosimilars, or near-copies of pricey biologic drugs, and off-patent former blockbusters like respiratory drugs Singulair and Nasonex.
Merck & Co. on Thursday reported net income of $1.55 billion, or 61 cents per share, down from $3 billion, or $1.19 per share, a year earlier.
Earnings, adjusted for one-time gains and costs, were $1.31 per share, two cents below the average estimate of three analysts surveyed by Zacks Investment Research.
The Kenilworth, New Jersey, drugmaker posted revenue of $11.4 billion, up 22% from $9.4 billion in 2020’s second quarter.
The revenue increase was driven by higher sales of Keytruda, the Gardasil vaccine against cancer-causing human papilloma virus infections, surgery anesthetic Bridion and veterinary medicines.
Total prescription drug sales climbed 22% to $9.98 billion, while sales of drugs and vaccines for pets and livestock jumped 34% to $1.47 billion.
Merck expects full-year earnings in the range of $5.47 to $5.57 per share, with revenue in the range of $46.4 billion to $47.4 billion. Both forecasts are well down from its prior estimates because of the revenue lost from the spinoff.
Merck shares fell $1.21, or 1.5%, to $77.12 in early trading.
This story has been corrected to show analysts expected earnings per share of $1.33, not $1.30, and that Merck missed that expectation.
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