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Merck Issues FY21 Outlook; Elects Robert Davis As CEO

Merck (MRK) said it expects full-year 2021 non-GAAP EPS to be between $6.48 and $6.68, including an approximately 3% positive impact from foreign exchange. The company noted that the changes to non-GAAP reporting resulted in a positive impact to projected 2021 non-GAAP EPS of approximately $0.08. The company anticipates Organon & Co. Spinoff in late second-quarter 2021.

Merck projects full-year 2021 revenue to be between $51.8 billion and $53.8 billion, including a positive impact from foreign exchange of approximately 2%. The company assumes an unfavorable impact to revenue of approximately 2% due to the COVID-19 pandemic, all of which relates to pharmaceutical segment sales.

Fourth quarter non-GAAP EPS was $1.32 compared to $1.16, a year ago. On average, 16 analysts polled by Thomson Reuters expected the company to report profit per share of $1.38, for the quarter. Analysts' estimates typically exclude special items.

Fourth-quarter worldwide sales were $12.5 billion, an increase of 5%. Analysts expected revenue of $12.68 billion, for the quarter. Pharmaceutical sales increased 8% to $11.4 billion. Excluding the favorable effect from foreign exchange, sales grew 6%.

Merck also announced that Kenneth Frazier, chairman and chief executive officer, will retire as CEO, effective June 30, 2021. Frazier will continue to serve on board as executive chairman, for a transition period.

The Merck board has unanimously elected Robert Davis, the company's current executive vice president, global services and chief financial officer, as chief executive officer, as well as a member of the board, effective July 1, 2021. Davis will become president of Merck, effective April 1, 2021.

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