NYSE$MRK

Merck & Co. · Q3 2022 earnings

Q3 2022 earnings · · Investor relations

Briefing

Merck's Q3 2022 financial results demonstrated exceptional revenue and underlying earnings growth, driven by oncology, vaccines, and hospital acute care products.

Merck reported strong Q3 2022 results, with revenue increasing by 13% to $13.0 billion in Pharmaceutical sales and Non-GAAP EPS of $1.85. The growth was primarily driven by Keytruda and Gardasil sales.

  • Third-quarter pharmaceutical sales increased 13% to $13.0 billion.
  • Growth in oncology was largely driven by higher sales of KEYTRUDA, which rose 20% to $5.4 billion in the quarter.
  • Third-quarter GARDASIL/GARDASIL 9 sales grew 15% to $2.3 billion, primarily driven by strong demand outside of the U.S., particularly in China.
  • Non-GAAP EPS was $1.85 for the third quarter of 2022 compared to $1.78 for the third quarter of 2021.

Headline financials

Total Revenue

$15B

Previous: $13.2B+13.7%
EPS (adj)

$1.85

Previous: $1.75+5.7%
KEYTRUDA sales

$5.4B

Previous: $4.5B+20.0%
GARDASIL sales

$2.3B

Previous: $2B+15.0%
Capital Expenditures

$3.24B

No prior period
Free Cash Flow

$3.25B

Previous: $4.57B-28.9%
Net Income

$3.25B

Previous: $4.57B-28.9%
Operating Income

$3.1B

Previous: $4.82B-35.6%
Gross Profit

$11B

Previous: $9.7B+13.6%
Cash & Equivalents

$11.1B

Previous: $10B+11.3%
Total Assets

$107B

Previous: $93.5B+14.5%
Stock-Based Comp

$139M

Previous: $117M+18.8%

Revenue & EPS history

Merck · Revenue · Quarterly

$15B

Q3 2022+13.7%vs Q3 2021
Beat estimate in 12 of 15 quarters(80%)
ActualEstimate

Revenue by segment

Merck · $14.4B total across 2 segments · Q3 2022

  • Pharmaceutical
    $13B+13.0%
  • Animal Health
    $1.4B+0.0%

Forward guidance

Merck is raising and narrowing its full-year outlook for sales and non-GAAP EPS, despite a negative impact from foreign exchange.

Tailwinds

  • Merck expects sales growth of 20% to 21% in 2022, with full-year sales estimated to be between $58.5 billion and $59.0 billion.
  • Excluding LAGEVRIO, Merck expects sales growth of approximately 12% for full-year 2022.
  • Merck expects its full-year non-GAAP effective income tax rate to be approximately 14%.
  • Merck is raising and narrowing its expected full-year 2022 non-GAAP EPS to be between $7.32 and $7.37.
  • The company is narrowing its expected full year sales range of LAGEVRIO to be between $5.2 billion and $5.4 billion.

Headwinds

  • Merck continues to experience strong global momentum across its key pillars of growth, particularly in oncology and vaccines. As a result, Merck is raising and narrowing its full-year outlook for sales and non-GAAP EPS, despite a negative impact from foreign exchange.
  • At mid-October 2022 exchange rates, Merck expects sales growth of 20% to 21% in 2022, with full-year sales estimated to be between $58.5 billion and $59.0 billion, including a negative impact from foreign exchange of approximately 4%, including a less than 1% incremental negative impact from prior sales outlook.
  • Merck is lowering its expected full-year 2022 GAAP EPS to be between $5.68 and $5.73.
  • Merck is raising and narrowing its expected full-year 2022 non-GAAP EPS to be between $7.32 and $7.37, including a negative impact from foreign exchange of approximately 4% at mid-October exchange rates.
  • Operational strength of approximately $0.20 is partially offset by the following negative impacts, which were not reflected previously in the outlook: The non-GAAP range excludes acquisition- and divestiture-related costs and costs related to restructuring programs as well as income and losses from investments in equity securities.

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 20 quarterly earnings reports · overlaid with Q3 2022

Historical avgQ3 2022

-0.4%

Avg return

Earnings day

-0.4%

Avg return

5 days after

+1.4%

Avg return

30 days after

51%

37 / 73 earnings

Positive

+8.0%

Q3 2021

Best reaction

-11.7%

Q3 2017

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q1 2026+1.0%+2.0%+6.9%
Q4 2025+2.2%+7.6%+2.4%
Q3 2025-1.0%-3.1%+21.1%
Q2 2025+1.2%+1.0%+5.2%
Q1 2025+1.5%+7.6%-1.5%
Q4 2024-9.1%-12.5%-5.8%
Q3 2024-2.8%-3.0%-3.0%
Q2 2024-11.5%-9.8%-8.1%
Q1 2024+3.3%+1.7%+2.0%
Q4 2023+4.7%+5.1%+5.1%
Q3 2023-0.8%-0.9%-1.7%
Q2 2023-0.9%-1.5%+2.2%
Q1 2023+1.8%+3.9%-2.1%
Q4 2022-3.8%-1.2%-0.1%
Q3 2022+2.4%+1.4%+9.2%
Q2 2022-2.1%-4.0%-2.2%
Q1 2022+5.1%+3.2%+10.3%
Q4 2021-4.2%-6.2%-5.1%
Q3 2021+8.0%+9.2%-2.9%
Q2 2021-1.9%-2.5%-2.6%
Q1 2021-3.4%-1.4%-1.6%
Q4 2020-2.0%-2.9%-5.4%
Q3 2020-3.4%-4.6%+1.5%
Q2 2020+4.5%+3.4%+8.4%
Q1 2020-3.8%-7.5%-5.9%
Q4 2019-3.0%-3.1%-7.0%
Q3 2019+4.9%+3.3%+6.6%
Q2 2019+0.6%+2.4%+5.1%
Q1 2019+2.5%+4.2%+3.8%
Q4 2018+3.3%+4.0%+9.7%
Q3 2018-0.2%+3.3%+5.9%
Q2 2018+1.2%+2.3%+7.9%
Q1 2018-2.7%-1.9%+1.1%
Q4 2017-5.8%-6.6%-9.2%
Q3 2017-11.7%-10.7%-12.3%
Q2 2017+0.3%-0.4%-1.2%
Q1 2017+2.0%+2.5%+4.6%
Q4 2016+3.5%+3.4%+7.2%
Q3 2016+0.2%-3.1%+1.5%
Q2 2016+0.4%-1.3%+7.6%
Q1 2016-2.2%
Q4 2015-3.6%
Q3 2015+4.1%
Q2 2015+2.7%
Q1 2015+4.5%
Q4 2014-3.0%
Q3 2014-3.1%
Q2 2014+0.2%
Q1 2014+3.3%
Q4 2013+0.5%
Q3 2013-2.1%
Q2 2013-0.3%
Q1 2013-2.7%
Q4 2012-5.6%
Q3 2012-1.4%
Q4 2011-1.0%
Q2 2012+2.6%
Q1 2012+2.0%
Q3 2011-1.5%
Q2 2011-1.6%
Q1 2011-0.7%
Q4 2010+0.8%
Q3 2010-1.8%
Q2 2010+0.8%
Q1 2009-0.1%
Q1 2010+0.1%
Q4 2009+1.4%
Q4 2007+1.4%
Q3 2009-3.5%
Q3 2008-3.5%
Q2 2008+1.7%
Q2 2009+1.7%
Q4 2008+1.7%

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