The 10-second takeaway
For the quarter ended Sep. 30 (Q3), Merck met expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue dropped and GAAP earnings per share expanded.
Gross margins dropped, operating margins shrank, net margins grew.
Merck logged revenue of $11.49 billion. The 15 analysts polled by S&P Capital IQ anticipated sales of $11.58 billion on the same basis. GAAP reported sales were 4.4% lower than the prior-year quarter's $12.02 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 $0.95. The 16 earnings estimates compiled by S&P Capital IQ forecast $0.92 per share. GAAP EPS of $0.56 for Q3 were 1.8% higher than the prior-year quarter's $0.55 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 64.0%, 60 basis points worse than the prior-year quarter. Operating margin was 20.6%, 110 basis points worse than the prior-year quarter. Net margin was 15.1%, 100 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $11.59 billion. On the bottom line, the average EPS estimate is $0.84.
Next year's average estimate for revenue is $47.18 billion. The average EPS estimate is $3.81.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 2,677 members out of 2,882 rating the stock outperform, and 205 members rating it underperform. Among 772 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 733 give Merck a green thumbs-up, and 39 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 $46.14.
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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. The Motley Fool has no positions in the stocks mentioned above. 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.