Merck reported second-quarter non-GAAP EPS of $1.06 compared to $1.01, prior year
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GAAP earnings per share were $0.63 compared to $0.71. Net income to Merck & Co. declined 12% year-over-year to $1.71 billion.
Second-quarter worldwide sales were $10.5 billion, an increase of 5 percent compared with the second quarter of 2017, including a 1 percent positive impact from foreign exchange. Analysts expected revenue of $10.29 billion for the quarter.
Second-quarter pharmaceutical sales increased 6 percent to $9.3 billion including a 3 percent positive impact from foreign exchange.
The company said the increase was primarily driven by growth in oncology, vaccines and hospital acute care, partially offset by lower sales in virology and the ongoing impacts of the loss of market exclusivity for several products.
The growth in oncology was driven by a significant increase in sales of KEYTRUDA, during the quarter.
Second-quarter gross margin was 67.3 percent compared to 68.6 percent for the second quarter of 2017.
The company said the decrease in gross margin for the second quarter of 2018 was primarily driven by the amortization of amounts capitalized for potential future milestone payments related to collaborations, the amortization of unfavorable manufacturing variances, in part resulting from the June 2017 cyber-attack, as well as the unfavorable effects of foreign exchange.
Second-quarter research and development (R&D) expenses were $2.3 billion compared with $1.8 billion in the second quarter of 2017.
The company said the increase was driven primarily by a $344 million charge for the Viralytics Limited acquisition, increased clinical development spending, in particular from oncology collaborations, as well as investment in early drug development.
Merck narrowed its full-year 2018 revenue range to be between $42.0 billion and $42.8 billion, including a slightly positive impact from foreign exchange at current exchange rates.
The company narrowed and raised its full-year 2018 GAAP EPS range to be between $2.51 and $2.59.
Merck narrowed and raised its full-year 2018 non-GAAP EPS range to be between $4.22 and $4.30. The company noted that both include an approximately 1 percent negative impact from foreign exchange at current exchange rates. ■