Merck (MRK) Q4 earnings report 2023

Merck on Thursday reported fourth-quarter revenue and adjusted earnings that topped estimates as it saw strong demand for its blockbuster cancer drug Keytruda and HPV vaccine Gardasil. 

The pharmaceutical giant posted a net quarterly loss, however, due to previously announced charges associated with a deal the company struck in October with the Japanese drugmaker Daiichi Sankyo to co-develop three highly sought-after cancer treatments.

Here’s what Merck reported for the fourth quarter compared with what Wall Street was expecting, based on a survey of analysts by LSEG, formerly known as Refinitiv:

• Earnings per share: 3 cents adjusted vs. a loss of 11 cents per share expected
• Revenue: $14.63 billion vs. $14.50 billion expected

Shares of Merck rose almost 3% on Thursday.

The company posted a net loss of $1.23 billion, or 48 cents per share, for the quarter. That compares with net income of $3.02 billion, or $1.18 per share, during the year-earlier period. 

Excluding acquisition and restructuring costs, Merck earned 3 cents per share for the fourth quarter. The company’s results include a charge of $1.69 per share related to the Daiichi Sankyo deal. 

Merck raked in $14.63 billion in revenue for the quarter, up 6% from the same period a year ago. 

Those results come as Merck shows significant progress in preparing for Keytruda’s patent expiration in 2028, with a handful of new deals under its belt and key drug launches ahead. The loss of exclusive rights to the drug will likely mean its sales will fall, forcing the company to draw revenue from elsewhere.

Merck CEO Robert Davis said on an earnings call Thursday that the company “feels very good” about the progress it has made to grow its drug portfolio. But he said “we need more” products, adding that the company remains interested in signing acquisitions or collaboration deals.

Merck also issued its full-year 2024 guidance, which was generally in line with expectations. The company expects revenue to come in between $62.7 billion and $64.2 billion and adjusted earnings to be $8.44 to $8.59 per share this year. 

Analysts surveyed by LSEG expected Merck to forecast full-year sales of $63.52 billion and adjusted earnings of $8.42 per share. 

That adjusted earnings outlook includes a one-time charge of roughly 26 cents per share…