Merck & Co. MRK reported first quarter 2015 earnings of 85 cents per share, beating the Zacks Consensus Estimate of 75 cents. Earnings, however, declined 3.4% from the year-ago period.
The Quarter in Detail
Merck’s Pharmaceutical segment posted revenues of $8.3 billion, down 2%. Currency movement negatively impacted revenues by 7%. Cubist products boosted sales by $208 million including Cubicin sales of $182 million.
Products like Janumet, Januvia and Simponi performed well. However, this was offset by lower revenues of Remicade, Zetia/Vytorin, Isentress, Gardasil, Nasonex, PegIntron, Cozaar/Hyzaar and Temodar.
Keytruda, launched recently, brought in sales of $83 million in the first quarter of 2015, up from $50 million in the fourth quarter of 2014.
Merck’s animal health segment posted revenues of $829 million, up 2% benefiting from higher companion animal product sales.
Marketing and administrative expenses declined 13.2% to $2.3 billion in the first quarter of 2015. R&D spend increased 9.7% to $1.7 billion in the first quarter of 2015.
Earnings Guidance Up
Merck raised its 2015 earnings guidance to $3.35 and $3.48 per share from the earlier guidance of $3.32 – $3.47 per share. Revenue guidance remains unchanged at $38.3 billion – $39.8 billion. Currency is expected to impact earnings by 27 cents and revenues by about $2.8 billion. Revenues will also be impacted by about $1 billion due to net lost sales from acquisitions and divestitures.
Meanwhile, Merck expects marketing and administrative spend to decline from 2014 levels. However, R&D spend is expected to be slightly above 2014 levels. The company spent $6.5 billion and $10.9 billion on R&D and marketing and administrative matters, respectively, in 2014.
Merck’s first quarter results were better-than-expected despite headwinds like generic competition and unfavorable currency movement. Moreover, the company raised its earnings outlook for 2015 at a time when other health care companies like Pfizer PFE lowered their 2015 outlook to reflect the impact of currency movement. Meanwhile, Merck continues to progress with its pipeline.