Merck (NYSE:MRK) announced its results for the third quarter on October 26, 2012. Merck is a global research-driven company that develops and manufactures a range of innovative pharmaceutical products to improve human and animal health.

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The Numbers: Merck's EPS outpaced analyst estimates while the company's revenues came in below predictions. The company reported adjusted net income of 95 cents per share versus the 93 cents per share estimate and revenues of $11.49 billion versus the $12.17 billion estimate. Revenue fell 4.4% from the same period last year. Slumping revenue in the last quarter ends Merck's streak of four consecutive quarters of revenue increases. For the third quarter, the company reported profit of $1.76 billion. This is 4.2% higher than the year-ago quarter.

Management Quote: "Our strong global sales this quarter offset the impact of the SINGULAIR patent expiry in the U.S.," said Kenneth C. Frazier, chairman and chief executive officer of Merck. "We will continue to drive value for our customers and shareholders through Merck's four-part strategy of executing on our core business, expanding geographically in high-growth markets, extending our complementary businesses and excelling at managing our costs while investing for growth. With our robust pipeline, we remain on target to submit multiple new products for marketing approval between now and the end of 2013, including suvorexant for insomnia, odanacatib for osteoporosis and TREDAPTIVE for multiple lipid parameters."

Looking Ahead: Analysts are pessimistic about the company's results for the next quarter. The average estimate has fallen for the fourth quarter to 84 cents per share, down from 85 cents seven days ago. Decreasing earnings estimates is generally a negative sign as it suggests analyst believe future earnings to be weaker than previously anticipated. For the fiscal year, the average estimate has moved down from $3.82 a share to $3.81 over the last 90 days.

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Tickers in this Article: MRK

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