By Ransdell Pierson
July 30 Merck & Co Inc's quarterly
revenue fell short of expectations on disappointing results for
the company's consumer and animal health products and weak
overseas sales of prescription drugs that were slammed by the
The second-biggest U.S. drugmaker behind Pfizer Inc
said on Tuesday that it had earned $906 million, or 30 cents per
share, in the second quarter, compared with $1.79 billion, or 58
cents per share, a year earlier.
Excluding special items such as costs of $1.77 billion from
acquisitions and $278 million for restructuring, Merck earned 84
cents per share. Analysts, on average, expected 83 cents per
Revenue fell 11 percent to $11.01 billion, while Wall Street
expected $11.22 billion. The results suffered from generic
competition for Merck's Singulair asthma drug, which lost U.S.
patent protection a year ago.
Revenue would have fallen 8 percent if not for the stronger
dollar, which lowers the value of sales in overseas markets.
"Despite the revenue shortfall, Merck still drove earnings
higher than expected because of lower expenses and a lower tax
rate, as well as fewer outstanding shares" of its stock," said
Edward Jones analyst Judson Clark.
Merck said it expected full-year sales to be about 5
percent to 6 percent below last year's levels, worse than the 3
percent to 4 percent decline it had previously forecast, largely
due to the stronger dollar.
Even so, Merck said it was able to affirm its full-year 2013
profit outlook of $3.45 to $3.55 per share, excluding special
items, because of aggressive cost controls. It earned $3.82 per
share last year.
"We are managing our costs in order for us to meet our
bottom line (earnings) guidance," Chief Executive Officer
Kenneth Frazier said in a conference call with analysts.
Animal health sales fell 2 percent to $851 million, hurt by
weak demand for swine products. Sales of consumer care products,
which range from Dr. Scholl's foot pads to Coppertone sunscreen,
dropped 11 percent to $490 million due to the termination in
China of distribution arrangements and returns from those
Combined sales of diabetes treatment Januvia and a related
combination drug called Janumet rose 5 percent to $1.5 billion,
a rebound from a 1 percent decline in the prior quarter. But
overseas sales of Januvia fell 5 percent.
Sales of arthritis drug Remicade rose 2 percent to $527
million. Gardasil, a vaccine to prevent cervical cancer and
other diseases caused by human papillomavirus, was a bright spot
in the earnings report. Its sales rose 18 percent to $383
million, helped by strong continued vaccination in males and
increasing use in Latin America.
Merck shares were down 0.3 percent at $48.18 in early