BUSINESS

Drugmaker Merck's 2Q net drops 11 pct on acquisition, other charges, but it beats expectations

07/27/2012 08:57 EDT | Updated 09/26/2012 05:12 EDT
WHITEHOUSE STATION, N.J. - Merck & Co.'s second-quarter net income fell 11.4 per cent as slightly higher sales were offset by acquisition and restructuring costs, but the drugmaker beat Wall Street expectations.

The maker of diabetes pill Januvia and asthma and allergy medicine Singulair said Friday that its net income was US$1.79 billion, or 58 cents per share, down from $2.02 billion, or 65 cents per share, a year earlier.

Excluding one-time items, net income was $3.23 billion, or $1.05 per share, up from $2.95 billion, or 95 cents per share, in 2011's second quarter. That beat analysts' expectations of earnings per share of $1.01.

Revenue rose 1.3 per cent to $12.31 billion. Analysts polled by FactSet, on average, expected $12.15 billion.

Pharmaceutical sales rose 2 per cent, to $10.56 billion.

Sales were led by Singulair, up 3 per cent to $1.43 billion in its last quarter before generic competition arrives on Aug. 3 and starts to cut sales. Sales of Januvia and combo pill Janumet both jumped about 30 per cent, to $1.06 billion and $411 million, respectively.

Sales of veterinary medicines climbed 8 per cent to $865 million, and sales of consumer health products such as the Coppertone sun care line edged up 2 per cent to $552 million.

"This quarter we delivered strong operational performance by focusing on growth and execution,' CEO Kenneth Frazier said in a statement.

Merck reiterated its 2012 forecast for profit of $2.04 to $2.30, or $3.75 to $3.85 per share excluding charges.

Shares of Merck rose $1.17, or 2.7 per cent, to $44.50 in premarket trading.