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Merck Q2 Profit Down; Cuts FY21 Outlook Below Market Estimates

Merck & Co., Inc. (MRK) reported Thursday that its second-quarter profit declined from last year, despite higher sales. Further, for fiscal 2021, the company trimmed outlook for adjusted earnings per share below market estimates.

In pre-market activity on NYSE, Merck shares were losing around 2.02 percent to trade at $76.75.

For the second quarter, net income fell 48 percent to $1.21 billion or $0.48 per share from last year's $2.34 billion or $0.92 per share. Adjusted net income was $3.32 billion or $1.31 per share, compared to $2.59 billion or $1.02 per share a year ago.

Sales for the quarter climbed 22 percent to $11.40 billion from $9.35 billion a year ago.

On average, analysts polled by Thomson Reuters expected earnings of $1.44 per share on revenues of $11.54 billion for the quarter. Analysts' estimates typically exclude special items.

Sales grew 19 percent at constant exchange rates reflecting ongoing recovery from the covid-19 pandemic and strong underlying demand across the company's portfolio of innovative products.

Looking ahead, Merck now expects full-year 2021 earnings per share between $4.24 and $4.34, and adjusted earnings per share between $5.47 and $5.57.

Merck now expects sales growth of 12 percent to 14 percent in 2021. The company narrowed and raised estimated full-year 2021 revenue range to be between $46.4 billion and $47.4 billion, including a positive impact from foreign exchange of less than 2 percent.

Analysts estimate full-year earnings of $6.15 per share on sales of $48.59 billion.

The company continues to experience strong global underlying demand across its business.

The company previously expected full-year earnings per share between $5.05 and $5.25, and adjusted earnings per share between $6.48 and $6.68, including a positive impact from foreign exchange of less than 3 percent.

Merck earlier expected sales growth of 8 percent to 12 percent in 2021 with revenue estimated to be between $51.8 billion and $53.8 billion.

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