Size of Merck Profit Disappoints
WHITEHOUSE STATION, N.J. (AP) _ Merck & Co. said Thursday its third-quarter earnings rose 19 percent but investors who had expected more sent the stock spiraling downward.
The Whitehouse Station, N.J.-based company, whose products include the Pepcid brand heartburn medication, earned $1.2 billion, or 99 cents a share, up from $1 billion, or 83 cents a share, during the same period in 1996.
Profit fell slightly below analysts’ expectations of $1 a share, but many had hoped for a pleasant earnings surprise. Merrill Lynch immediately downgraded the stock, helping to prompt a sell-off that sent Merck shares down $4.93 3/4 a share to $97.31 1/4 in midday trading on the New York Stock Exchange _ a plunge of nearly 5 percent.
Sales for the quarter were $5.93 billion, up 19 percent from the $4.98 billion reported for the same period in 1996.
The drug maker divested its crop protection business in July and launched a venture in August with Rhone-Poulenc to combine their animal health and poultry genetics businesses to form Merial Ltd. Adjusted for those moves, sales for the third quarter increased 23 percent, the company said.
Earnings included higher sales of Pepcid; Zocor cholesterol-lowering medication; and Prinivil, a drug used to treat high blood pressure.
For the first nine months of the year, the company earned $3.37 billion dollars, or $2.79 per share, compared with $2.84 billion, or $2.33 per share, during the same period last year.