Merck KGaA lifts earnings guidance on demand for lab tools

FILE PHOTO: A logo of drugs and chemicals group Merck KGaA is pictured in Darmstadt, Germany January 28, 2016. REUTERS/Ralph Orlowski

FRANKFURT (Reuters) - Healthcare and chemicals group Merck KGaA MRCG.DE lifted its guidance for full year earnings after the scramble to ready treatments and vaccines against the coronavirus bolstered demand for its supplies for biotech labs.

Core earnings before special items in 2020 will likely be between 5.05 billion euro ($5.94 billion) and 5.25 billion euros, The German group said in a statement on Thursday, also citing the release of provisions worth 365 million after winning a legal dispute with Biogen BIIB.O.

Merck previously predicted a range for 2020 of 4.45 billion to 4.85 billion euros, up from 4.39 billion a year earlier.

Merck said it won “additional business related to the COVID-19 effort” but also saw a “strong recovery of the business following the closures of academic laboratories in the first half of 2020 due to the pandemic”.

In the third quarter, adjusted core profit for the group, or earnings before interest, taxes, depreciation and amortisation (EBITDA), jumped more than 50% to 1.7 billion euros, beating the average estimate of 1.6 billion in an analyst poll posted on its website.

Earnings at its life science tools division, which supplies gear and chemicals for biotech labs, rose a better-then-expected 19% to 630 million euros.

Reporting by Ludwig Burger; Editing by Riham Alkousaa and Emma Thomasson