Merck Plans Restructuring After Beating Estimates
(Bloomberg) -- Merck & Co. beat first-quarter analyst expectations Tuesday, helped along by growing sales in its cancer and vaccines businesses, but plans to make cost cuts that will result in a charge of up to $1.2 billion.
- First-quarter adjusted earnings were $1.22 a share, topping the $1.05 per share average of analysts’ estimates. To read more details on the results, click here.
- Merck will close some plants and shed workers as part of a cost-cutting effort over the next several years. Because of the cuts, the company said it expects to take a charge of $800 million to $1.2 billion by the end of 2023.
- Analyst expectations for cancer blockbuster Keytruda have gotten higher and higher as the drug gets approved for more uses. Keytruda had sales of $2.27 billion in the first quarter, just shy of the $2.32 billion average of analysts’ estimates.
- Merck’s vaccine segment -- which mostly includes measles, mumps and rubella -- saw sales surge by 27 percent, hauling in $496 million to beat analyst estimates of $410 million. The drugmaker is the only company licensed to offer the measles vaccine in the U.S., which has seen 704 individual cases through April 26, a record high since 1994.
- Merck shares rose 1 percent to $77.53 at 10:11 a.m. in New York. The stock is up less than 1.6 percent this year to date.
- Adjusted earnings were up from a year prior as well, when Merck reported EPS of $1.05 a share. Sales of Keytruda are up 55 percent over that period.
- To read the company press release, click here.
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