Merck's Profit Rises 12% On Strong Sales of New Drugs

Strong sales of new medications helped Merck & Co.'s first quarter profit rise 12%, while the company reaffirmed its full year guidance in its earnings release this morning. Powering Merck's results were a range of new drugs including diabetes pill Januvia, cervical-cancer vaccine Gardasil, asthma medication Singulair, and cholesterol meds Vytorin and Zetiamade, helping Merck offset the loss of $800 million in revenue from cholesterol drug Zocor after patent protection ended last year. By the numbers, net earnings climbed to $1.7 billion, good for EPS of $0.78, up from $1.52 billion (EPS of $0.69) in the year earlier period. Excluding non-recurring costs from plant closings and job cuts, EPS was $0.84 cents, in-line with Merck's earnings preview of April 13. Revenue climbed 6.7% to $5.77 billion. Thomson Financial consensus estimates were for EPS of $0.84 on revenue of just $5.36 billion. The company confirmed its full year guidance range of EPS of $2.75-$2.85 excluding restructuring charges, or EPS of $2.60-$2.75 on a reported basis. Merck is projecting second quarter profit of $0.67-$0.71, excluding charges.

Sources: Press Release, Bloomberg, MarketWatch, Reuters. [check back later today for Merck's conference call transcript]
Commentary: Merck: Looking Out for Investors • Merck Prevails in Significant Patent Extension Case vs. Hi-Tech Pharmacal • FDA Panel Nixes Merck's Arcoxia; Shares Climb on Raised Guidance
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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