Merck & Co. Earnings: Here’s Why Shares are Down Now

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 0.29%.

Merck & Co. Inc. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share decreased 20% to $0.84 in the quarter versus EPS of $1.05 in the year-earlier quarter.

Revenue: Decreased 10.57% to $11.01 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Merck & Co. Inc. reported adjusted EPS income of $0.84 per share. By that measure, the company beat the mean analyst estimate of $0.83. It missed the average revenue estimate of $11.22 billion.

Quoting Management: “With seven of our top 10 products growing in the second quarter and solid performance overall, we continue to navigate significant patent expiries and adapt to the evolving global healthcare environment,” said Kenneth C. Frazier, chairman and chief executive officer, Merck. “We remain committed to pursuing innovative, best-in-class science that translates into medically important products, such as our PD-1 inhibitor for oncology. To enable further investment in promising growth opportunities, we continue to manage costs effectively, as reflected in our results for the quarter.”

Key Stats (on next page)…

Revenue increased 3.18% from $10.67 billion in the previous quarter. EPS decreased 1.18% from $0.85 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 $0.95 to a profit $0.90. For the current year, the average estimate has moved down from a profit of $3.61 to a profit of $3.48 over the last ninety days.

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