Merck (MRK) Tops Q3 EPS by 8c, Lifts FY EPS Gudiance

October 27, 2017 6:46 AM EDT

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(Updated - October 27, 2017 6:49 AM EDT)

Merck (NYSE: MRK) reported Q3 EPS of $1.11, $0.08 better than the analyst estimate of $1.03. Revenue for the quarter came in at $10.3 billion versus the consensus estimate of $10.55 billion.

Financial Outlook

Merck has narrowed and raised its full-year 2017 GAAP EPS range to be between $1.78 and $1.84. Merck narrowed and raised its full-year 2017 non-GAAP EPS range to be between $3.91 and $3.97, including a less than 1 percent negative impact from foreign exchange at current exchange rates. The non-GAAP range excludes acquisition- and divestiture-related costs, costs related to restructuring programs, a charge related to the formation of the collaboration with AstraZeneca and certain other items.

Merck has narrowed and raised its full-year 2017 revenue range to be between $40.0 billion and $40.5 billion, including a less than 1 percent negative impact from foreign exchange at current exchange rates.

The following table summarizes the company’s 2017 financial guidance.

GAAP Non-GAAP2
Revenue $40.0 to $40.5 billion

$40.0 to $40.5 billion*

Operating expenses Lower than 2016 Higher than 2016 by a mid-single digit rate
Effective tax rate 24.5% to 25.5% 20.0% to 21.0%
EPS $1.78 to $1.84 $3.91 to $3.97

*The company does not have any non-GAAP adjustments to revenue.

A reconciliation of anticipated 2017 GAAP EPS to non-GAAP EPS and the items excluded from non-GAAP EPS are provided in the table below.

$ in millions, except EPS amounts

Full-Year 2017
GAAP EPS $1.78 to $1.84
Difference4 2.13
Non-GAAP EPS that excludes items listed below2 $3.91 to $3.97
Acquisition- and divestiture-related costs $3,800
Restructuring costs 850
Aggregate charge related to the formation of the collaboration with AstraZeneca 2,350
Net decrease (increase) in income before taxes 7,000
Estimated income tax (benefit) expense (1,130)
Decrease (increase) in net income $5,870

The expected full-year 2017 GAAP effective tax rate of 24.5 to 25.5 percent reflects an unfavorable impact of approximately 4.5 percentage points from the above items.

(Street sees FY EPS of $3.87 on revenue of $40.32 billion)

For earnings history and earnings-related data on Merck (MRK) click here.



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