Tuesday, July 21, 2009

Merck figures - it's all about the cuts

Merck, set to buy rival Schering-Plough Corp., said profit dropped less than analysts expected on savings from job cuts, boosting the shares in before-market trading.

Second-quarter net income fell 12 percent to $1.59 billion, or 74 cents a share, Whitehouse Station, New Jersey-based Merck said today in a statement on Business Wire. Excluding items, the company said it earned 83 cents a share, exceeding the 77-cent estimate of 12 analysts surveyed by Bloomberg.

Revenue dropped 2 percent to $5.9 billion, the company said. Chief Executive Officer Richard T. Clark aims to reverse the sales decline partly by spending about $44 billion to buy Schering-Plough for its experimental treatments. Clark also is in the process of firing more than 7,000 workers to reduce costs. Merck is looking to spur sales of its vaccines, which suffered in previous quarters from manufacturing interruptions and weakness in Gardasil demand.
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