Merck (NYSE: MRK ) reported its third-quarter results this morning, reported adjusted net earnings per share of $0.92, beating expectations. But revenue of $11.03 billion came in below what investors had hoped to see, as poor sales of Merck's Januvia diabetes drug added to the continued loss of revenue from the now off-patent asthma treatment Singulair to produce an overall 4% drop in sales from the year-ago quarter.
Revenue declines were seen across the board, as pharmaceutical sales dropped 4%, revenue from its animal-health division fell 2%, and consumer-care sales declined 2%. Adverse currency impacts were responsible for about two percentage points of Merck's revenue declines. Within the pharmaceutical area, sales of Singulair fell by more than half, while Januvia saw a 5% drop in sales. Encouraging double-digit revenue gains from HPV-drug Gardasil and rheumatoid arthritis treatment Remicade weren't enough to pull up Merck's overall results.
Still, CEO Kenneth Frazier was upbeat. Frazier cited "strong contributions from our vaccine, immunology and HIV businesses, and effective cost management" in its financial results, and specifically noted the FDA's granting of breakthrough-therapy status to the MK-5172/MK-8742 combination treatment for hepatitis C as an encouraging development during the quarter. Merck cut $260 million from its marketing and administrative spending and $258 million from its research and development expenses as a result of its efforts to rein in costs.
Looking forward, Merck narrowed its adjusted earnings per share guidance to a range of $3.48 to $3.52, the middle of its previous range, but it reduced GAAP-earnings guidance from a range of $1.84 to $2.05 to a lower range of $1.61 to $1.79 . It still expects full-year sales to fall 5% to 6% from 2012. As of 7:45 a.m. EDT, Merck shares were down 1.7% in pre-market trading.
Merck will have a conference call at 8 a.m. EDT to discuss the results in further detail. For more information, visit the Merck investor relations webcast site.