The 10-second takeaway
For the quarter ended March 31 (Q1), Merck met expectations on revenues and met expectations on earnings per share.
Compared to the prior-year quarter, revenue grew slightly and GAAP earnings per share increased significantly.
Gross margins were steady, operating margins grew, net margins expanded.
Merck reported revenue of $11.73 billion. The 17 analysts polled by S&P Capital IQ wanted to see a top line of $11.82 billion on the same basis. GAAP reported sales were 1.3% higher than the prior-year quarter's $11.58 billion.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.99. The 19 earnings estimates compiled by S&P Capital IQ averaged $0.98 per share. GAAP EPS of $0.56 for Q1 were 65% higher than the prior-year quarter's $0.34 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 65.6%, about the same as the prior-year quarter. Operating margin was 23.5%, 20 basis points better than the prior-year quarter. Net margin was 14.8%, 580 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $12.27 billion. On the bottom line, the average EPS estimate is $1.04.
Next year's average estimate for revenue is $47.37 billion. The average EPS estimate is $3.81.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 2,711 members rating the stock outperform and 205 members rating it underperform. Among 716 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 676 give Merck a green thumbs-up, and 40 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Merck is outperform, with an average price target of $41.82.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.