Merck’s Sales Contract, Outlook Cautious (MRK)
NYSE: MRK) reported quarterly earnings results that edged past Street’s estimate, investors were disappointed after the pharmaceutical company provided cautious guidance and said that it would postpone seeking approval for its potential blockbuster osteoporosis drug.
Merck said on Friday that it would not seek approval for widely anticipated-odanacatib, a treatment for osteoporosis, until next year. According to Jeffrey Holford, an analyst at Jefferies, the delay will disappoint many investors.
Merck’s Chief Executive Kenneth C. Frazier said that that the decision was not taken due to any pressure from the Food and Drug Administration (FDA). In fact, the Company is confident of its potential and the postponement was necessitated only to include supplementary data from external trail, Frazier said.
For the fiscal fourth quarter, Merck reported adjusted earnings or non-GAAP earnings of 83 cents a share, compared with 97 cents a share, in the year-earlier quarter. A 7.3% drop in fourth-quarter profit was due to last year’s expiration of patent protection for asthma treatment, Singulair, which impacted sales. Singular was once Merck’s top-selling drug. Its sales slumped 67% to $480 million, in the fiscal fourth quarter.
Revenue during the period contracted to $11.7 billion, from $12.29 billion, in the same period of last year.
Analysts’ consensus estimate was for earnings of 81 cents a share on revenue of $11.49 billion, according to a data compiled by Thomson Reuters.
Revenue was boosted by strong sales of Januvia drug, meant for treating diabetes and Gardasil, a vaccine intended to cure cancer.
For fiscal 2013, Merck expects earnings to be in the range of $2.03 to $2.26 per share. On adjusted basis, earnings are expected to come in the range of $3.60 to $3.70 a share on revenue which is expected to be 1% to 2% lower than 2012’s level. In fiscal 2012, revenue stood at $47.27 billion.
Analysts polled by Thomson Reuters were expecting earnings of $3.68 a share on revenue of $45.61 billion.
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Post Written By: Ed Liston
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.
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