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The Key Takeaways
- Merck shares fell sharply Tuesday morning after the drugmaker's profits and 2025 outlook fell short of estimates.
- However, revenue and adjusted earnings managed to exceed expectations.
- The company reported that the lower demand for Merck’s drugs abroad and the lower prices in the U.S. had a negative impact on sales.
Merck shares tumbled Tuesday morning after the drugmaker's soft outlook outweighed fourth-quarter revenue that topped expectations.
Visible Alpha’s estimates show that Merck reported $15.62 billion of revenue in the first quarter. That was an increase of 7% over the same period last year, and slightly above the estimated $15.43 million. Net income for the company was $3.74 billion or $1.48 a share. This compares to a loss of $1.2 billion a year earlier but is below what analysts expected.
After adjusting for one-time charges like costs related to acquisitions, however, Merck's adjusted net income of $4.37 billion topped estimates of $4.21 billion.
Outlook for 2025 is far below estimates
In 2025, drugmaker estimates revenue between $64.1 billion and $65.6 million, while adjusted earnings per share is expected between $8.88 per share to $9.03. The consensus estimate for 2025 is $67.08 Billion in Revenue and $9.09 Adjusted EPS.
Sales rose across most of Merck's medication portfolio, with declining sales for Gardasil and Januvia attributed to lower demand in some international regions and lower pricing in the U.S., respectively.
Merck stock was down by more than 10% on Tuesday.
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