Merck (MRK) revealed stronger-than-expected second-quarter profits and reiterated its full-year outlook on Tuesday, as strong growth across vaccines and diabetes drugs helped to offset losses from key patent expirations.
The No. 2 U.S. pharmaceutical company reported net income of $906 million, or 30 cents a share, compared with a year-earlier profit of $1.79 billion, or 58 cents a share.
Excluding one-time items like restructuring and acquisition-related costs, Merck said it earned 84 cents, topping average analyst estimates in a Thomson Reuters poll by a penny.
Revenue for the three-month period fell 11% to $11 billion from $12.3 billion a year ago, below the consensus view of $11.23 billion. The dip was primarily due to the ongoing effects of the 2012 patent expiration of Merck’s asthma/allergy treatment Singulair, which saw sales slump by 80% during the quarter.
“With seven of our top 10 products growing in the second quarter and solid performance overall, we continue to navigate significant patent expiries and adapt to the evolving global health-care environment," Merck CEO Kenneth Frazier said in a statement.
Last quarter's earnings were cushioned by tighter cost management, expansion in emerging markets and rallying demand for diabetes treatment Janumet and HPV vaccine Gardasil.
The Whitehouse Station, N.J.-based drugmaker reiterated its non-GAAP EPS target of $3.45 to $3.55, in-line with the Street’s $3.48 a share.
Shares of Merck slid narrowly in pre-market trade to $48.20. They are up 18% year-to-date.