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Merck & Co. Q4 profit, sales up YOY

Merck & Co. Inc. said its fourth-quarter earnings rose year over year, and it set guidance for full year 2018.

The New Jersey-based drugmaker said non-GAAP net income for the quarter came in at $2.67 billion, or 98 cents per share, up from $2.47 billion, or 89 cents per share, in the year-ago period.

The S&P Capital IQ consensus normalized EPS estimate for the fourth quarter is 94 cents.

Fourth-quarter sales were $10.43 billion, up from $10.12 billion in the previous year. The company's cancer therapy Keytruda saw a 169% year-over-year growth in sales to $1.30 billion in the fourth quarter. The treatment, in combination with chemotherapy, was recently shown to improve the survival of lung cancer patients whose tumors had spread to another location on the body in a phase 3 trial.

For full year 2018, the company expects non-GAAP EPS to come in at $4.08 to $4.23 and revenue to reach $41.2 billion to $42.7 billion.

The S&P Capital IQ consensus normalized EPS estimate for 2018 is $4.11.

On a GAAP basis, the company incurred a fourth-quarter net loss of $872 million, or 32 cents per share, compared to a net loss of $594 million, or 22 cents per share, in the year-ago quarter. This includes a $2.6 billion provisional charge related to U.S. tax reform.

Full-year results

Merck's full-year 2017 non-GAAP net income came in at $10.93 billion, or $3.98 per share, up from $10.54 billion, or $3.78 per share, in the year-ago period.

The S&P Capital IQ consensus normalized EPS estimate for 2017 is $3.94.

Full-year sales came in at $40.12 billion, up from $39.81 billion in the year-ago period. The company's sales numbers for the year and for the quarter reflect incremental sales of about $140 million and $400 million, respectively, due to vaccine sales from 19 European countries that were part of the company's vaccines joint venture with Sanofi Pasteur SA, which was terminated in December 2016.

For full year 2017, the company saw GAAP net profit of $2.57 billion, or 93 cents per share, down from $3.92 billion, or $1.41 per share, in the year-ago period. Merck's full-year GAAP net profit also reflects a $2.6 billion provisional charge related to U.S. tax reform as well as a $2.35 billion charge related to the formation of an oncology collaboration with AstraZeneca.