Merck beats 2Q profit forecasts, lowers guidance
KENILWORTH, N.J. (AP) - Slightly higher sales and substantial cost-cutting by Merck & Co. boosted second-quarter profit 75 percent, but the drugmaker lowered its financial forecast for the year, citing higher restructuring costs in the quarter.
Meanwhile, increased competition is reducing sales or slowing growth for several of its big sellers, and new drugs in the hot categories of hepatitis C and immune system-boosting cancer drugs are trailing those of rivals dominating those markets.
The Kenilworth, New Jersey, company still edged past Wall Street expectations for profit and it matched sales forecasts.
Shares rose $1, or 1.7 percent, to $59.43 in premarket trading
Merck posted net income of $1.21 billion, or 43 cents per share, up from $687 million, or 24 cents per share, a year earlier. Earnings, adjusted for one-time costs related to mergers and acquisitions and restructuring costs, came to 93 cents per share.
The average estimate of nine analysts surveyed by Zacks Investment Research was for earnings of 92 cents per share.
The second-biggest U.S. drugmaker reported revenue of $9.84 billion in the period, up 1 percent.
Merck said it now expects full-year earnings in the range of $1.98 to $2.08 per share, excluding one-time items. That's down from its May forecast of $1.96 to $2.23.
It expects adjusted 2016 earnings of $3.67 to $3.77 per share, a tighter range than the $3.65 to $3.77 per share it forecast in the spring, and revenue of $39.1 billion to $40.1 billion.
"We remain committed to advancing our pipeline, delivering a balanced and differentiated portfolio, and achieving long-term sustainable growth," CEO Kenneth Frazier said in a statement.
Merck shares have risen 11 percent since the beginning of the year, while the Standard & Poor's 500 index has risen 6 percent. The stock has risen nearly 2 percent in the last 12 months.
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Elements of this story were generated by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research. Access a Zacks stock report on MRK at http://www.zacks.com/ap/MRK