UPDATE 2-Merck KGaA's FY drugs outlook disappoints
* Q3 EBIT 222 mln eur, as expected by analysts
* Outlook for prescription drugs unit at lower end of range
* Liquid crystals FY sales seen down 20 pct, top of range
* Merck specifies FY group sales, adjusted operating margin
* Shares down 2.7 pct, worst in DAX (Rewrites throughout, adds analyst comments)
DARMSTADT, Germany, Oct 26 (Reuters) - Merck KGaA's (MRCG.DE) 2009 outlook fell short of market expectations on Monday as the drugs-to-chemicals hybrid remained wary about prospects for its main prescription drugs business.
The unit, Merck Serono, which accounts for more than two-thirds of group sales, is in line for a 2009 operating profit, excluding one-off write-downs and special items, of 20 percent of sales, toned down from a previous outlook of 20-25 percent, Merck said on Monday.
It cited the impact of expensive late-stage drug trials and the cost of financing market launches.
"The guidance for Merck Serono shows that caution prevails at the company," M.M. Warburg & Co analyst Ulrich Huwald commented. "The market focuses more on this part of the company because it generates the more stable earnings."
He said that the euro's recent strength seems to have weighed on the business, which includes cancer drug Erbitux and multiple sclerosis treatment Rebif.
Merck sees full-year sales at the business up 6 percent, the bottom end of a previous outlook range of 6-9 percent.
A weak U.S. currency undermines the value of sales in the crucial dollar zone. The euro has been flirting with 14-month highs above $1.50.
Merck said third-quarter group earnings before interest and tax (EBIT) fell 28 percent from a year earlier to 222.2 million euros ($333 million), in line with analyst expectations in a Reuters poll, as sales rose an in-line 2.7 percent.
For 2009, Merck said it sees a revenue increase of 2 percent, compared to a previous outlook of a gain 0-5 percent.
It expects an operating margin, adjusted for one-off writedowns, of 17 percent, narrowing down previous guidance of 15-20 percent. Continued...
