Merck Guides FY24 EPS Above Estimates As Q4 Results Top Estimates

(RTTNews) - Biopharmaceutical company Merck & Co., Inc. (MRK) reported Thursday a net loss for the fourth quarter compared to a profit last year, hurt by hefty charge, despite 6 percent sales growth. However, both adjusted earnings per share and quarterly sales topped analysts' estimates.

In pre-market activity on the NYSE, MRK shares are trading at $123.43, up $2.65 or 2.19 percent.

For the fourth quarter, the company reported a net loss attributable to the company of $1.23 billion or $0.48 per share, compared to net income of $3.02 billion or $1.18 per share in the prior-year quarter.

The latest quarter included a charge of $1.69 per share on collaboration agreements with Daiichi Sankyo. Excluding items, adjusted earnings for the quarter was $0.03 per share, compared to $1.62 per share in the year-ago quarter.

On average, 18 analysts polled by Thomson Reuters expected the company to report a loss of $0.11 per share for the quarter. Analysts' estimates typically exclude special items.

Worldwide total sales for the quarter increased 6 percent to $14.63 billion from $13.83 billion in the same quarter last year, driven by growth in oncology, vaccines and hospital acute care, partially offset by a decline in virology, due to LAGEVRIO, and diabetes. The Street was looking for revenues of $14.50 billion for the quarter.

Excluding Lagevrio and the Impact of Foreign Exchange, total sales increased 14 percent.

Lagevrio sales plunged 77 percent to $193 million. Worldwide sales growth, excluding Lagevrio, was 11 percent. Growth excluding Lagevrio and foreign exchange impact was 13 percent.

Pharmaceutical sales increased 8 percent to $13.14 billion, with KEYTRUDA sales growing 21 percent or 22 percent in constant currency, to $6.61 billion, and GARDASIL / GARDASIL 9 sales increasing 27 percent, to $1.87 billion, while JANUVIA / JANUMET sales declined 14 percent or 13 percent in constant currency, to $787 million from last year.

Animal Health sales increased 4 percent to $1.28 billion from last year, primarily driven by higher demand for companion animal products.

The company said it obtained FDA priority review of Biologics License Applications for V116, an investigational pneumococcal conjugate vaccine, as well as Merck and Daiichi Sankyo's Patritumab Deruxtecan, in the fourth quarter.

Further, Merck recently approved a new restructuring program (2024 Restructuring Program) intended to continue the optimization of the company's Human Health global manufacturing network as the future pipeline shifts to new modalities, and also to optimize the Animal Health global manufacturing network to improve supply reliability and increase efficiency.

Looking ahead to fiscal 2024, Merck now projects adjusted earnings in a range of $8.44 to $8.59 per share on sales between $62.7 billion and $64.2 billion.

Analysts expect annual earnings of $8.42 per share on revenues of $63.52 billion for the year.

In early January, Merck announced the acquisition of Harpoon, which is expected to close in the first half of 2024, and result in a non-tax deductible charge of approximately $650 million of R&D expense included in adjusted results. The impact of the transaction on expected full-year adjusted earnings per share is approximately $0.26 per share, which is included in the 2024 outlook.

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