Merck's third-quarter earnings topped analysts’ expectations even as global sales fell 4.3 percent, hurt partly by patent expirations and a drop in sales of its hepatitis C drugs.
The No. 2 U.S. drugmaker, which owns such brands as Dr. Scholl’s and Coppertone, said it earned $895 million, or 31 cents per share, down from $1.12 billion, or 38 cents per share, a year earlier. Excluding restructuring costs and other items, earnings were 90 cents per share, topping the average analyst forecast of 88 cents per share, according to Thomson Reuters I/B/E/S. Revenue decreased to $10.56 billion from $11.03 billion last year, partly on divestitures and the termination of a joint venture with AstraZeneca.
The Whitehouse Station, New Jersey-based company narrowed its earnings outlook for the year by three cents on each end, to a range of $3.46 to $3.50 per share. It now expects revenue to be between $42.4 billion and $42.8 billion.
Merck has been shedding noncore assets and cutting expenses while developing new products amid growing competition from generic drug makers. Earlier this month, the company sold its consumer care business -- which includes prescription rights to Claritin and Afrin -- to Germany's Bayer AG for $14.2 billion. The sale is seen as part of Merck’s efforts to lift earnings. The company, which operates in more than 140 countries, also recently gained approval for its drug Keytruda for the treatment of melanoma and for its insomnia drug Belsomra.
“Last October, we launched a multi-year initiative to transform Merck and build a platform for sustained, future growth,” Kenneth C. Frazier, its chief executive and chairman, said in a statement. “One year later, we delivered solid third-quarter results and are making steady progress in our transformation, including divesting noncore assets, reducing our expense base and investing in our promising new product launches and pipeline.”
Some analysts have urged Merck to take more aggressive steps to further cut expenses by selling off other businesses, including older drugs that have lost U.S. patent protection that are sold in emerging markets. “We will continue to evaluate opportunities as appropriate,” Frazier said Monday on a conference call with analysts.