Drugmaker Merck & Co. raised its earnings projections yesterday both for 1Q07 as well as for FY2007, sending shares up $0.97, or 2.25% to $44.15. The upward revision in earnings expectations is based on better-than-expected sales thus far in 2007, the result of strong sales among the five new Merck drugs and vaccines approved in the U.S. last year. Bloomberg terms the success of such drugs as Merck's cervical cancer vaccine and a diabetes drug "a sign that the company's strategy of investing in research on diseases that have few treatments is paying off." On an adjusted basis, Merck expects to report first quarter earnings of between $0.63-$0.67 a share; consensus estimates were for between $0.59 (Bloomberg) and $0.60 (MarketWatch) a share. For the year, Merck now expects to earn between $2.55 and $2.65 a share; estimates were for EPS of between $2.60 (Bloomberg) and $2.62 (MarketWatch).
Sources: Wall Street Journal, Business Week, Bloomberg, MarketWatch
Commentary: HPV Vaccine Mandates - State Update • Merck's Earnings Fall 58%; Wyeth's Rise 17% • Potential Mandatory Vaccination May Prove Healthy For Merck, GlaxoSmithKline
Stocks/ETFs to watch: Merck & Co. (MRK). Competitors: Pfizer Inc. (PFE), Wyeth (WYE), Schering-Plough Corp. (SGP), Novartis AG (NVS), Teva (TEVA), AstraZeneca plc (AZN), GlaxoSmithKline plc (GSK), Sanofi-Aventis (SNY), Eli Lilly & Co. (LLY), Abbott Laboratories (ABT), Amgen (AMGN). ETFs: iShares Dow Jones US Pharmaceuticals (IHE), Pharmaceutical HOLDRs (PPH)
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