Merck (MRK) earnings report Q1 2025

Merck on Thursday lowered its full-year profit guidance, citing $200 million in estimated costs for tariffs and a charge tied to a recent deal.

The corporate now expects its 2025 adjusted earnings to are available in between $8.82 and $8.97, down barely from a previous outlook of $8.88 to $9.03 per share.

The corporate said the expected tariff charge primarily reflects levies between the U.S. and China, and Canada and Mexico to a lesser degree. Merck has built a sturdy presence in China, which is taken into account one in every of the corporate’s most significant markets and is home to a few of its partners and manufacturing and research and development sites. 

Merck noted that the brand new outlook doesn’t account for President Donald Trump’s planned tariffs on pharmaceuticals imported into the U.S., that are prompting some drugmakers to bolster their U.S. manufacturing footprints. 

That features Merck, which has invested $12 billion in U.S. manufacturing and research and development and expects to place greater than $9 billion more into the country by the top of 2028.

However the guidance does include a one-time charge of roughly 6 cents per share related to the corporate’s license agreement with Hengrui Pharma, which it announced in March.

Merck reiterated its full-year sales forecast of between $64.1 billion and $65.6 billion. 

Also on Thursday, the drugmaker reported first-quarter revenue and profit that beat expectations, because it said it saw strength in its oncology portfolio and animal health products. 

Merck also cited “increasingly meaningful” sales contributions from two recently launched drugs. They’re Winrevair, which is used to treat a rare, deadly lung condition, and Capvaxive, a vaccine designed to guard adults from a bacteria generally known as pneumococcus that may cause serious illnesses and lung infection. 

Sales of those drugs will likely be critical to Merck’s efforts to offset losses from its top-selling cancer therapy Keytruda, which is able to lose exclusivity in 2028. 

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

• Earnings per share: $2.22 adjusted vs. $2.14 expected
• Revenue: $15.53 billion vs. $15.31 billion expected

The corporate posted net income of $5.08 billion, or $2.01 per share, for the quarter. That compares with net income of $4.76 billion, or $1.87 per share, through the year-earlier period. 

Excluding acquisition and restructuring costs, Merck earned $2.22 per share for the primary quarter. 

Merck raked in $15.53 billion in revenue for the quarter, down 2% from the identical period a 12 months ago.

Merck’s pharmaceutical unit, which develops a wide selection of medicine, booked $13.64 billion in revenue through the first quarter. That is down 3% from the identical period a 12 months ago.

Keytruda recorded $7.21 billion in revenue through the quarter, up just 4% from the year-earlier period. 

That increase was driven by higher uptake of Keytruda for earlier-stage cancers and powerful demand for the drug for metastatic cancers, which spread to other parts of the body. Still, sales got here under the $7.43 billion that analysts had expected, in response to StreetAccount estimates.  

Notably, Merck continued to see trouble with China sales of Gardasil, a vaccine that forestalls cancer from HPV, probably the most common sexually transmitted infection within the U.S. 

China has retaliated with tariffs of 125% on goods from the U.S. Some experts said China’s tariffs on U.S. products could lead on to increased prices or limited supply of some popular Western medicines for Chinese patients, Reuters reported.

Merck’s animal health division, which develops vaccines and medicines for dogs, cats and cattle, posted nearly $1.59 billion in sales, up 5% from the identical period a 12 months ago. The corporate said higher demand for livestock products and sales from Elanco’s aqua business, which it acquired last 12 months, drove that growth.