Merck & Co., Inc. (MRK) reported a profit for the first-quarter that increased 10 percent from last year. Quarterly sales increased 11 percent. The company lowered its full-year 2020 outlook, due to the impact of COVID-19.
Both adjusted earnings per share and quarterly revenues topped analysts’ expectations.
Merck lowered its full-year 2020 GAAP earnings per share outlook to a range of $4.12 – $4.32 from the previous outlook of $4.57 and $4.72.
The company cut its full-year 2020 non-GAAP earnings per share guidance to a range of $5.17 – $5.37, from the prior guidance of $5.62 – $5.77. Analysts expect annual earnings of $5.56 per share.
The company now expects its full-year 2020 revenue to be between $46.1 billion and $48.1 billion, compared to the prior estimation of $48.8 billion – $50.3 billion. Analysts expect revenues of $ 48.72 billion.
For the full-year 2020, Merck expects an unfavorable impact to revenue of about $2.1 billion (excluding the impact of foreign exchange) due to COVID-19, comprised of about $1.7 billion for pharmaceuticals and approximately $400 million for Animal Health.
The company said it has temporarily suspended its share repurchase program.
In many markets, the company has paused in-person interactions with health care providers and our field-based employees are working from home, including in the U.S.
The company reported that its first-quarter net income attributable to the company rose 10 percent to $3.22 billion from last year’s $2.92 billion, with earnings per share improving to $1.26 from $1.12 last year.
Non-GAAP earnings per share were $1.50 for the first quarter compared to $1.22 in the previous year. Analysts polled by Thomson Reuters expected the company to report earnings of $1.34 per share for the quarter. Analysts’ estimates typically exclude special items.
Worldwide sales for the first-quarter were $12.06 billion, an increase of 11% from last year’s $10.82 billion. Wall Street analysts had a consensus revenue estimate of $11.46 billion for the quarter. Excluding the Impact from Foreign Exchange, sales grew 13%.
First-quarter pharmaceutical sales increased 10% to $10.7 billion, excluding the unfavorable effect from foreign exchange, sales grew 12%. The increase was driven primarily by growth in oncology and vaccines, partially offset by the ongoing impacts of the loss of market exclusivity for several products.
Growth in oncology was largely driven by higher sales of KEYTRUDA, which grew 45% to $3.3 billion for the quarter, reflecting strong momentum from the non-small cell lung cancer indications as well as continued uptake in other indications.
Animal Health sales were $1.2 billion for the first quarter of 2020, an increase of 18% compared with the first quarter of 2019; excluding the unfavorable effect from foreign exchange, Animal Health sales grew 21%.
Merck said it remains confident in the fundamental underlying demand for its products and its prospects for long-term growth, though COVID-related disruptions to patients’ ability to access health care providers will cause near-term challenges.
The company also is engaged with a range of research organizations on collaborative efforts to accelerate the development of medicines and vaccines for COVID-19.
In Tuesday pre-market trade, MRK is trading at $82.40, down $1.62 or 1.93 percent.
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