Drugmaker Merck & Co. Inc. (MRK, Financial) reported its third-quarter results before the opening bell on Oct. 26.
The New Jersey-based company posted adjusted earnings per share of $1.11, beating estimates of $1.03. Quarterly revenue of $10.33 billion missed expectations of $10.54 billion and decreased 2% from the prior-year quarter.
Shares fell 2.4% in premarket trading following the announcement.
The trend in Merck’s revenue growth over the past decade is illustrated in the graph below.
The company said sales of its cancer drug, Keytruda, more than doubled to $1.05 billion. Total revenue, though, was negatively affected by disruptions caused by the NotPetya cyber attack on June 27 and loss of market share among its older drugs.
The cyber attack, which affected dozens of companies, disrupted the production of some of Merck's medicines and vaccines
Sales were also hurt by the U.S. Centers for Disease Control and Prevention, which borrowed Merck’s Gardasil vaccine due to a temporary production shutdown following the cyber attack.
The company also paid a $2.35 billion charge related to its collaboration with AstraZeneca PLC (AZN, Financial) for Lynpraza, a cancer drug.
In a statement, Chairman and CEO Kenneth C. Frazier commented on the company’s performance.
“Our performance in the third quarter demonstrates the strength of our underlying business, with growth from key product launches, good global demand for vaccines as well as strength from our Animal Health business,” he said. “We will continue augmenting our pipeline through value-creating business development like our oncology collaboration with AstraZeneca to address unmet medical need and drive future growth.”
The company revised its outlook for the full year. It expects adjusted EPS for 2017 to fall between $3.91 and $3.97, up from its previous forecast of $3.76 to $3.88. Full-year revenue is expected to range from $40 billion to $40.5 billion.
Among the 32 gurus invested in Merck, the Vanguard Health Care Fund (Trades, Portfolio) has the largest holding with 1.1% of outstanding shares. During the third quarter, Ken Fisher (Trades, Portfolio) added to his position while the T Rowe Price Equity Income Fund (Trades, Portfolio) curbed its position.
The pharmaceutical company has a market cap of $162.5 billion; its shares were trading around $59.58 on Friday with a price-earnings (P/E) ratio of 32.38, a price-book (P/B) ratio of 4.12 and a price-sales (P/S) ratio of 4.13. According to GuruFocus estimates, the stock has gained 1% year to date.
Disclosure: I do not own any stocks mentioned.
