logo
Plus   Neg
Share
Email

Merck KGaA Stock Dips On Weak Q2 Profit; Confirms FY18 Forecast

Shares of Merck KGaA (MKGAY.PK) were losing around 3 percent in the morning trading after the German drug maker reported Thursday weak profit in its second quarter, despite slight rise in sales. Looking ahead, the company maintained fiscal 2018 forecast for organic sales growth and EBITDA pre.

For the year, Merck continues to expect a moderate organic net sales increase of 3% to 5% over the previous year. Overall, excluding the Consumer Health business, which is now reported as a discontinued operation, Merck forecasts Group net sales in a range of between 14.1 billion euros and 14.6 billion euros in 2018 reflecting exchange rate effects. The company previously expected 2018 sales of 14.0 billion euros to 14.5 billion euros from continuing operations.

The company noted that exchange rate effects will have a moderately negative impact on net sales. However, at negative 3% to negative 5%, the impact will be slightly lower than previously forecast.

Further, the company confirmed its previous forecast of a slight organic decline of 1% to 3% in EBITDA pre. It continues to expect that Group EBITDA pre will be in a corridor of between 3.75 billion and 4.0 billion euros in 2018.

Stefan Oschmann, Chairman of the Executive Board and CEO of Merck, said, "Overall, we confirm our forecast for organic performance in 2018, a year of transition with many challenges, as already stated at the beginning of the year."

For the second quarter, net income declined 42% to 247 million euros from 426 million euros in the prior year. Earnings per share were 0.57 euros, compared to 0.98 euros last year.

Adjusted earnings per share were 1.23 euros, compared to 1.51 euros last year.

Group EBIT dropped 35.4% to 392 million euros. Adjusted EBITDA declined 13.7% to 920 million euros impacted primarily by exchange rate effects.

Second-quarter Group sales edged up 0.5% to 3.7 billion euros, despite considerably negative foreign exchange effects. Organically, Group sales grew 5.2% thanks to the Life Science and Healthcare business sectors. Life Science business sector results were driven by growth in all three business units.

In Germany, Merck shares were trading at 87.46 euros, down 3.32 percent.

by RTTNews Staff Writer

For comments and feedback: editorial@rttnews.com

Business News

Follow RTT