Merck Earnings: Exceeding Estimates Not Enough to Impress

Merck & Co. Inc. (NYSE:MRK) delivered a profit and beat Wall Street’s expectations, AND beat the revenue expectation. Despite exceeding Wall Street analyst estimates, investors are focused on the revenue drop as shares are down 2.89%.

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Merck & Co. Inc. Earnings Cheat Sheet

Results: Net income increased 67.99% to $2.54 billion ($2.54 per diluted share) in the quarter versus a net gain of $1.51 billion in the year-earlier quarter.

Revenue: Decreased 4.51% to $11.74 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Merck & Co. Inc. reported adjusted net income of $2.54 per share. By that measure, the company beat the mean analyst estimate of $0.81. It beat the average revenue estimate of $11.48 billion.

Quoting Management: “Merck overcame significant challenges last year and delivered strong results in 2012 by successfully growing our businesses, expanding geographically and reducing our expenses. As we begin 2013, we are well-positioned to further execute on our business strategy,” said Kenneth C. Frazier, Chairman and CEO of Merck…

…We remain committed to investing for future growth and innovation to deliver value over the long term. Merck is rapidly advancing many compounds that are potentially first-in-class or best-in-class. Additionally, we will continue to pursue external opportunities that have the potential to deliver value to the company and its shareholders.”

Key Stats:

Revenue increased 2.19% from $11.49 billion in the previous quarter. Net income increased 46.91% from $1.73 billion in the previous quarter.

Looking Forward: Analysts have a more positive outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has risen from a profit of $0.88 to a profit $0.9. For the current year, the average estimate has moved down from a profit of $3.81 to a profit of $3.8 over the last ninety days.

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(Company fundamentals provided by Xignite Financials.)