Summary
Merck & Co., Inc. reported a decline in sales and net income for the third quarter and first nine months of 2013 compared to the prior year. This performance was significantly impacted by the loss of market exclusivity for key products, most notably Singulair, which experienced a substantial sales decrease following patent expiries. Revenue was also affected by unfavorable foreign exchange rates and continued pricing pressures in international markets. Despite the sales challenges, Merck announced a new global restructuring program aimed at sharpening its commercial and R&D focus, which involves workforce reductions and facility consolidations. The company also continued its robust share repurchase program, demonstrating a commitment to returning capital to shareholders. The company's pipeline shows ongoing development in key therapeutic areas, including advancements in allergy immunotherapy, oncology, and infectious diseases.
Financial Highlights
51 data points| Revenue | $11.03B |
| Cost of Revenue | $4.10B |
| Gross Profit | $6.93B |
| R&D Expenses | $1.66B |
| SG&A Expenses | $2.80B |
| Interest Expense | $215.00M |
| Net Income | $1.12B |
| EPS (Basic) | $0.38 |
| EPS (Diluted) | $0.38 |
| Shares Outstanding (Basic) | 2.93B |
| Shares Outstanding (Diluted) | 2.96B |
Key Highlights
- 1Sales decreased by 4% year-over-year for the third quarter of 2013, reaching $11.0 billion, primarily due to the loss of market exclusivity for Singulair.
- 2Net income attributable to Merck & Co., Inc. declined to $1.124 billion for the third quarter of 2013, down from $1.729 billion in the same period of 2012.
- 3A new global restructuring program was announced in October 2013, targeting approximately 8,500 job reductions to sharpen focus and improve efficiency, with an estimated cumulative pretax cost of $2.5 billion to $3.0 billion.
- 4The company repurchased approximately $5 billion of its common stock under an accelerated share repurchase (ASR) agreement in May 2013 as part of a larger $15 billion share repurchase program.
- 5Key growth drivers included Remicade, Gardasil, and Simponi, which partially offset declines in other product sales.
- 6Research and Development expenses decreased by 13% in the third quarter, reflecting productivity improvements and timing of clinical development programs.
- 7The company's long-term debt increased due to a $6.5 billion senior unsecured notes offering in May 2013.