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Merck Updates FY22 Guidance

While reporting second-quarter results on Thursday, Merck (MRK) said it continues to experience strong global underlying demand across its key pillars of growth, particularly in oncology and vaccines. As a result, the company is raising and narrowing its full-year guidance for sales. At mid-July 2022 exchange rates, Merck expects sales growth of 18% to 20% in 2022, with full-year sales estimated to be between $57.5 billion and $58.5 billion. The company continues to expect sales of $5.0 billion to $5.5 billion from LAGEVRIO for full-year 2022.

Merck narrowed its expected full-year 2022 non-GAAP EPS range to be between $7.25 and $7.35, including a negative impact from foreign exchange of approximately 3% at mid-July exchange rates. Merck expects its estimated full-year 2022 GAAP EPS to be between $5.89 and $5.99.

Analysts polled by Thomson Reuters expect the company to report profit per share of $7.36 on revenue of $58.1 billion. Analysts' estimates typically exclude special items.

Second quarter non-GAAP EPS increased to $1.87 from $0.61, prior year. On average, 16 analysts polled by Thomson Reuters expected the company to report profit per share of $1.69, for the quarter.

Non-GAAP gross margin was 74.7% for the second quarter of 2022 compared to 76.5%, prior year. The company said the decrease in non-GAAP gross margin primarily reflects impacts from LAGEVRIO, which has a lower gross margin due to profit sharing with Ridgeback, as well as higher inventory write-offs and manufacturing costs.

GAAP net income increased to $3.94 billion or $1.55 per share from $1.21 billion or $0.48 per share, previous year.

Sales increased to $14.59 billion from $11.40 billion, prior year. Analysts on average had estimated $13.9 billion in revenue. Pharmaceutical sales increased 28% to $12.8 billion. LAGEVRIO sales were $1.2 billion for the second quarter, primarily consisting of sales in Japan and the U.K.

Shares of Merck are down 1.7% in pre-market trade on Thursday.

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