Drugmaker Merck & Co. Inc. (MRK) on Thursday reported a turnaround to profit in the fourth quarter, reflecting higher revenues and fewer one-time charges compared to last year. Adjusted earnings topped analysts' expectations, while revenues missed their view.
Looking ahead, the company forecast fiscal year 2012 earnings and revenue in line with the Street estimates.
The company's net income for the fourth quarter was $1.51 billion or $0.49 per share, compared to net loss of $531 million or $0.17 per share in the prior-year period.
The latest quarterly results included acquisition-related charges of $1.48 billion and restructuring charges of $692 million, while the prior-year results included acquisition-related costs of $3.59 billion and restructuring costs of $354 million.
On an adjusted basis, earnings rose to $2.98 billion or $0.97 per share from $2.76 billion or $0.88 per share in the prior-year period. On average, 17 analysts polled by Thomson Reuters expected earnings $0.95 per share for the quarter. Analysts' estimates typically exclude one-time items.
Sales for the quarter grew 2 percent to $12.29 billion from $12.09 billion in the year-ago period, but missed analysts' consensus estimate of $12.53 billion.
Sales from emerging markets accounted for around 17 percent of pharmaceutical sales of $10.76 billion in the quarter.
Merck's asthma drug Singulair, which will lose patent exclusivity in 2012, recorded an 8 percent increase in sales to $1.46 billion. Sales of combined diabetes franchise of Januvia/Janumet grew 40 percent from last year to $1.3 billion, driven by growth in all regions.
Human papillomavirus vaccine Gardasil's sales rose 24 percent to $274 million, driven by increased vaccination of males aged 9 through 26. HIV drug Isentress grew sales 24 percent to $387 million, while inflammatory disease drug Remicade's sales dropped 28 percent to $511 million.
Merck Animal Health division's sales rose 6 percent to $868 million, with growth primarily led by increased sales of swine, poultry and companion animal products.
For fiscal year 2011, Merck's net income soared to $6.27 billion or $2.02 per share from $861 million or $0.28 per share last year.
Adjusted earnings per share rose to $11.70 billion or $3.77 per share from $10.72 billion or $3.42 per share in the prior year.
Worldwide sales for the year grew 4 percent to $48.05 billion from $45.99 billion in the previous year.
Analysts expected the company to earn $3.76 per share on revenues of $48.23 billion for the year.
Looking ahead to fiscal year 2012, Merck expects earnings in a range of $2.04 to $2.30 per share and adjusted earnings between $3.75 and $3.85 per share.
The company forecasts full-year revenues to be at or near 2011 levels on a constant currency basis. At current exchange rates, sales would be unfavorably affected by about 2 to 3 percent.
Analysts expect the company to earn $3.83 per share in 2012 on revenues of $47.62 billion.
MRK closed Wednesday's trading at $38.63, up $0.36 on a volume of 14.58 million shares. In Thursday's pre-market, the stock is adding $0.08 or 0.21 percent to 38.71.
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