Merck Earnings: Double-Digit Growth of Key Products

Lower costs helped S&P 500 (NYSE:SPY) component Merck & Co Inc. (NYSE:MRK) pull in a higher profit in the first quarter. Merck & Co. Inc. is a global research-driven company that develops and manufactures a range of innovative pharmaceutical products to improve human and animal health.

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Merck Earnings Cheat Sheet for the First Quarter

Results: Net income for Merck & Co Inc. rose to $1.04 billion (34 cents/share) vs. $298.8 million (9 cents/share) in the same quarter a year earlier. A more than threefold rise from the year earlier quarter.

Revenue: Rose 1.4% to $11.58 billion YoY.

Actual vs. Wall St. Expectations: MRK‘s adjusted income of 92 cents per share, beat the mean analyst estimate of 84 cents/share, which typically account for special items. Estimates ranged from 80 cents per share to 89 cents per share.

Quoting Management: “Merck’s first quarter performance underscores that we are successfully delivering on our intent to grow both the top line and the bottom line,” said Kenneth C. Frazier, president and chief executive officer. “Our strong results were largely driven by double-digit growth of key products combined with deliberate cost control measures across all areas of the company as we continue to create a more effective and efficient operating model.”

Key Stats: Gross margins grew 10.6 percentage points to 64.9%. The growth appeared to be driven by falling costs, as the figure fell 22.2% from the year earlier while revenue rose 1.4%.

Over the last five quarters, revenue has increased 61.9% on average year over year. The biggest increase came in the first quarter of the last fiscal year, when revenue rose more than twofold from the year earlier quarter.

Competitors to Watch: Johnson & Johnson (NYSE:JNJ), Pfizer Inc. (NYSE:PFE), Bristol Myers Squibb Co. (NYSE:BMY), GlaxoSmithKline plc (NYSE:GSK), Sanofi-Aventis SA (NYSE:SNY), Insmed (NASDAQ:INSM), Eli Lilly & Co. (NYSE:LLY), Abbott Laboratories (NYSE:ABT), Johnson & Johnson (NYSE:JNJ), Forest Labs (NYSE:FRX), Teva Pharmaceutical Industries Ltd (NASDAQ:TEVA), and Novartis AG (NYSE:NVS).

Today’s Performance: Shares of MRK are trading at $36.10 as of April 29, 2011 at 10:29 AM ET, up .84% from the previous close.


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