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