By Sam Boughedda
Merck's (NYSE:MRK) shares dipped in the early part of Thursday's session after it reported second-quarter earnings.
Profit and revenue topped analyst expectations, but the company's shares fell as low as $87.42 after guidance disappointed investors. The stock has since regained the majority of its initial losses.
Merck posted earnings of $1.87, $0.19 better than the analyst estimate of $1.68, with revenue coming in at $14.6 billion versus the consensus estimate of $13.83 billion, a 28% increase compared to the same period last year.
"Our strategy is working and our future is bright. I am very confident that we are well-positioned to achieve our near- and long-term goals, anchored by our commitment to deliver innovative medicines and vaccines to patients and value to all of our stakeholders, including shareholders," said Robert Davis, chief executive officer and president of Merck.
However, Merck sees fiscal 2022 earnings per share between $7.25 and $7.35, below the consensus of $7.36, with revenue expected to be between $57.5 billion and 58.5 billion, compared to the consensus of $58.1 billion.
Following the report, a Mizuho analyst reiterated a Buy rating and $100 price target on the stock, telling investors Merck "delivered a top-line and bottom-line beat that is above Mizuho estimates and Bloomberg consensus, driven by strong KEYTRUDA, GARDASIL, and BRIDION sales."
"Sales growth continued the positive Covid-19 recovery trend though there was a negative impact from foreign exchange. 2Q22 non-GAAP EPS was $1.87, above our forecast driven by KEYTRUDA and GARDASIL expansion - particularly in China - and LAGEVRIO sales in Japan and the U.K," added the analyst.