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Merck (MRK) to Report Q1 Earnings: What's in the Cards?
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Merck (MRK - Free Report) will report first-quarter 2020 results on Apr 28, before market open. In the last reported quarter, the company delivered a positive earnings surprise of 1.75%.
The large drugmaker’s performance has been pretty impressive, with the company exceeding earnings expectations in each of the trailing four quarters. The company has a four-quarter positive earnings surprise of 12.70%, on average.
Merck’s stock has declined 12.1% this year so far compared with a decrease of 3.1% for the industry.
Factors to Consider
Merck’s new products like cancer drug Keytruda and Bridion injection are likely to have driven the top line in the to-be-reported quarter backed by strong demand. Alliance revenues from Lynparza and Lenvima may have contributed to oncology sales. Please note that Merck markets Lynparza in partnership with AstraZeneca (AZN - Free Report) .
However, the top line is expected to reflect the impact of loss of exclusivity for some products including NuvaRing, biosimilar competition for Remicade in Merck’s marketing territories and competitive pressure on the diabetes franchise (Januvia/Janumet) and currency headwinds.
Keytruda sales might have been driven by continued strong momentum in first-line lung cancer indication and launch in newer indications, namely renal cell carcinoma and adjuvant melanoma. The Zacks Consensus Estimate for Keytruda’s sales is $3.28 billion.
Strong demand in most markets has been driving sales of Bridion (sugammadex) Injection – a trend that most likely continued in the first quarter. The Zacks Consensus Estimate for Bridion is $214 million.
In October 2019, Merck borrowed doses of its blockbuster vaccine, Gardasil from CDC stockpile to support routine vaccinations in the United States, and to free up some manufacturing capacity to make doses for ex-U.S. markets. The stockpile borrowing hurt fourth-quarter sales by approximately $120 million and led to a decline in sales of Merck’s Vaccine segment. It remains to be seen if the trend reversed in the first quarter of 2020. The Zacks Consensus Estimate for Gardasil is $838 million and for total Vaccine sales is $1.93 billion.
Animal health franchise is expected to have done well in the quarter, driven by higher sales of its companion animal and livestock products.
Importantly, investors will be keen to find out if Merck provides an updated business outlook on the earnings call. There is a concern about supply chain disruptions, caused by the outbreak, hurting drug/biotech companies’ first-half earnings.
With half of the world under a lockdown, delay is expected in completion of clinical studies, which could further delay drug approvals and their launch. Investors will look for any such updates from Merck on the call.
In February 2020, Merck announced that it will spin off products from its Women’s Health unit, legacy drugs and biosimilar products into a new publicly traded company. The transaction is expected to be completed by the first half of 2021. An update is expected on the first-quarter conference call.
Earnings Whispers
Our proven model does not conclusively predict an earnings beat for Merck this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that is not the case here.
Earnings ESP: Earnings ESP is 0.00% as the Most Accurate Estimate as well as the Zacks Consensus Estimate is pegged at $1.39 per share. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Merck has a Zacks Rank #3.
Stocks to Consider
Here are some large drug/biotech stocks that have the right combination of elements to beat on earnings this time around:
Glaxo (GSK - Free Report) has an Earnings ESP of +3.19% and a Zacks Rank #3. The company is scheduled to release results on Apr 29.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
Image: Bigstock
Merck (MRK) to Report Q1 Earnings: What's in the Cards?
Merck (MRK - Free Report) will report first-quarter 2020 results on Apr 28, before market open. In the last reported quarter, the company delivered a positive earnings surprise of 1.75%.
The large drugmaker’s performance has been pretty impressive, with the company exceeding earnings expectations in each of the trailing four quarters. The company has a four-quarter positive earnings surprise of 12.70%, on average.
Merck & Co., Inc. Price and EPS Surprise
Merck & Co., Inc. price-eps-surprise | Merck & Co., Inc. Quote
Merck’s stock has declined 12.1% this year so far compared with a decrease of 3.1% for the industry.
Factors to Consider
Merck’s new products like cancer drug Keytruda and Bridion injection are likely to have driven the top line in the to-be-reported quarter backed by strong demand. Alliance revenues from Lynparza and Lenvima may have contributed to oncology sales. Please note that Merck markets Lynparza in partnership with AstraZeneca (AZN - Free Report) .
However, the top line is expected to reflect the impact of loss of exclusivity for some products including NuvaRing, biosimilar competition for Remicade in Merck’s marketing territories and competitive pressure on the diabetes franchise (Januvia/Janumet) and currency headwinds.
Keytruda sales might have been driven by continued strong momentum in first-line lung cancer indication and launch in newer indications, namely renal cell carcinoma and adjuvant melanoma. The Zacks Consensus Estimate for Keytruda’s sales is $3.28 billion.
Strong demand in most markets has been driving sales of Bridion (sugammadex) Injection – a trend that most likely continued in the first quarter. The Zacks Consensus Estimate for Bridion is $214 million.
In October 2019, Merck borrowed doses of its blockbuster vaccine, Gardasil from CDC stockpile to support routine vaccinations in the United States, and to free up some manufacturing capacity to make doses for ex-U.S. markets. The stockpile borrowing hurt fourth-quarter sales by approximately $120 million and led to a decline in sales of Merck’s Vaccine segment. It remains to be seen if the trend reversed in the first quarter of 2020. The Zacks Consensus Estimate for Gardasil is $838 million and for total Vaccine sales is $1.93 billion.
Animal health franchise is expected to have done well in the quarter, driven by higher sales of its companion animal and livestock products.
Importantly, investors will be keen to find out if Merck provides an updated business outlook on the earnings call. There is a concern about supply chain disruptions, caused by the outbreak, hurting drug/biotech companies’ first-half earnings.
With half of the world under a lockdown, delay is expected in completion of clinical studies, which could further delay drug approvals and their launch. Investors will look for any such updates from Merck on the call.
In February 2020, Merck announced that it will spin off products from its Women’s Health unit, legacy drugs and biosimilar products into a new publicly traded company. The transaction is expected to be completed by the first half of 2021. An update is expected on the first-quarter conference call.
Earnings Whispers
Our proven model does not conclusively predict an earnings beat for Merck this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that is not the case here.
Earnings ESP: Earnings ESP is 0.00% as the Most Accurate Estimate as well as the Zacks Consensus Estimate is pegged at $1.39 per share. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Merck has a Zacks Rank #3.
Stocks to Consider
Here are some large drug/biotech stocks that have the right combination of elements to beat on earnings this time around:
Alexion Pharmaceuticals has an Earnings ESP of +0.83% and a Zacks Rank #2. The company is scheduled to release results on May 6. You can see the complete list of today’s Zacks #1 Rank stocks here.
Glaxo (GSK - Free Report) has an Earnings ESP of +3.19% and a Zacks Rank #3. The company is scheduled to release results on Apr 29.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
See 8 breakthrough stocks now>>