Merck & Co. Earnings: Here’s Why Investors Don’t Like These Results

Merck & Co. Inc. (NYSE:MRK) delivered a profit and beat Wall Street’s expectations, BUT came up short on beating the revenue expectation. The revenue miss is a negative sign to shareholders seeking high growth out of the company. Shares are down 4.66%.

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Merck & Co. Inc. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share decreased 14.14% to $0.85 in the quarter versus EPS of $0.99 in the year-earlier quarter.

Revenue: Decreased 9.04% to $10.67 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Merck & Co. Inc. reported adjusted EPS income of $0.85 per share. By that measure, the company beat the mean analyst estimate of $0.79. It missed the average revenue estimate of $11.09 billion.

Quoting Management: “Our first quarter performance reflects the challenges of major patent expiries coupled with the impact of currency and other headwinds,” said Kenneth C. Frazier, chairman and chief executive officer, Merck. “During the quarter, we took focused actions to reach our EPS target while at the same time advancing Merck’s pipeline in our laboratories and through strategic deals and partnerships. I remain confident in the future opportunities for our strong and diverse business and committed to delivering long-term value to our shareholders.”

Key Stats (on next page)…

Revenue decreased 9.08% from $11.74 billion in the previous quarter. EPS increased 2.41% from $0.83 in the previous quarter.

Looking Forward: Analysts have a more negative outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has fallen from a profit of $0.93 to a profit $0.91. For the current year, the average estimate has moved down from a profit of $3.68 to a profit of $3.63 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)