Tuesday, July 30, 2013

Merck Q2 2013 Sales A Little Light; EPS Slightly Better Than Consensus


I hate to say it, but Merck has become very predictable.

That's not horrible, but between the patent cliff, and the slowing growth of Januvia®/Janumet® -- offset by the "financial engineering" measures underway ($5 billion of executed share buybacks funded by borrowings, etc.) -- Merck will likely float along, languidly, at a slow cruise -- for the balance of 2013. It will meet its announced 2013 full-year guidance -- at the EPS line.

Even so, the foreign exchange effect of the strong dollar is really cutting into otherwise strong international sales growth.

. . . .“With seven of our top 10 products growing in the second quarter and solid performance overall, we continue to navigate significant patent expiries and adapt to the evolving global healthcare environment,” said Kenneth C. Frazier, chairman and chief executive officer, Merck. “We remain committed to pursuing innovative, best-in-class science that translates into medically important products, such as our PD-1 inhibitor for oncology. To enable further investment in promising growth opportunities, we continue to manage costs effectively, as reflected in our results for the quarter”. . . .


There you have it. Yawn. UPDATE: I can also report that Pfizer saw the same 3% currencies effect, so no worries there. All is as expected. Forward!

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