WHITEHOUSE STATION (dpa-AFX) - Healthcare giant Merck & Co. Inc. (MRK) reported Tuesday a second-quarter profit that more-than-doubled from last year, mainly on lower one-time charges and AstraZeneca-related gain, despite weak sales. Adjusted earnings per share and top line topped analysts' estimates. Further, the company lifted its fiscal 2014 forecast for earnings, and backed sales view.
The second-quarter 2014 net income attributable to the company increased to $2.004 billion from the prior year's $906 million, with earnings per share improving to $0.68 from $0.30 last year.
The latest results included one-time items of $489 million or $0.17 per share mainly on acquisition and restructuring costs, partly offset by gain on AstraZeneca option exercise. The prior year's charges were $1.62 billion or $0.54 per share.
Adjusted net earnings, which excluded items, were $2.49 billion or $0.85 per share, compared to $2.53 billion or $0.84 per share in the year ago quarter. On average, 16 analysts polled by Thomson Reuters expected the company to report earnings of $0.81 per share for the quarter. Analysts' estimates typically exclude special items.
Sales for the quarter declined 1 percent to $10.93 billion from $11.01 billion a year ago. Wall Street expected revenues of $10.60 billion. According to the firm, the decline in sales reflected unfavorable impact of patent expiries, divested products and decline in sales of Hepatitis C products.
Pharmaceutical sales dropped 2 percent to $9.09 billion due to the ongoing impact of the loss of market exclusivity for Temodar (temozolomide) and Nasonex (mometasone furoate monohydrate). Additionally, sales from the hepatitis franchise of Victrelis (boceprevir) and Pegintron (peginterferon alfa-2b) declined as a result of increased competition.
Meanwhile, consumer sales climbed 19 percent and animal health sales grew 2 percent.
The company's gross margin was 55.2 percent for the second quarter, compared to 61.1 percent a year ago.
Looking ahead for fiscal 2014, Merck now expects reported earnings per share to be between $4.44 and $4.77 including the potential impact of a Venezuelan Bolivar devaluation, and adjusted earnings per share to be between $3.43 and $3.53. Wall Street currently is looking for fiscal year 2014 earnings of $3.48 per share.
The company said in April that it expected GAAP earnings per share of between $2.15 and $2.47, and non-GAAP earnings per share to be between $3.35 and $3.53 for fiscal 2014.
The full-year adjusted earnings forecast includes $0.06 to $0.09 per share anticipated dilution from planned sale of Merck Consumer Care and Research collaboration with Bayer AG, and planned acquisition of Idenix Pharmaceuticals, Inc.
At current exchange rates, Merck continues to expect full-year 2014 revenues to be between $42.4 billion and $43.2 billion. Analysts project annual revenues of $42.56 billion.
In pre-market activity, Merck shares were gaining $0.73 or 1.26 percent, and trading at $58.70.
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