NYSE$MRK

Merck & Co. · Q3 2023 earnings

Q3 2023 earnings · · Investor relations

Briefing

Merck reported strong third-quarter results, driven by commitment to innovation and strategic investments.

Merck announced its third-quarter 2023 financial results, with GAAP EPS at $1.86 and non-GAAP EPS at $2.13. The increases in EPS were primarily due to operational strength, and were partially offset by the unfavorable impact of foreign exchange.

  • GAAP EPS was $1.86 for the third quarter of 2023.
  • Non-GAAP EPS was $2.13 for the third quarter of 2023.
  • R&D expenses decreased due to charges recorded in 2022 for intangible asset impairments and collaboration agreements.
  • Merck is raising and narrowing its full-year sales outlook, now expecting between $59.7 billion and $60.2 billion.

Headline financials

Total Revenue

$16B

Previous: $15B+6.7%
EPS (adj)

$2.13

Previous: $1.85+15.1%
KEYTRUDA sales

$6.34B

Previous: $5.4B+17.3%
GARDASIL sales

$2.61B

Previous: $2.3B+13.5%
Capital Expenditures

-$2.87B

Previous: $3.24B-188.7%
Free Cash Flow

$1.87B

Previous: $3.25B-42.4%
Net Income

$4.75B

Previous: $3.25B+46.1%
Operating Income

$5.73B

Previous: $3.1B+84.8%
Gross Profit

$11.7B

Previous: $11B+6.1%
Cash & Equivalents

$8.61B

Previous: $11.1B-22.8%
Total Assets

$107B

Previous: $107B-0.3%
R&D Expense

$3.31B

No prior period
Stock-Based Comp

$164M

Previous: $139M+18.0%

Revenue & EPS history

Merck · Revenue · Quarterly

$16B

Q3 2023+6.7%vs Q3 2022
Beat estimate in 12 of 15 quarters(80%)
ActualEstimate

Revenue by segment

Merck · $15B total across 2 segments · Q2 2023

  • Pharmaceutical
    $13.5B+5.6%
  • Animal Health
    $1.51B+0.6%

Forward guidance

Merck is raising and narrowing its full-year sales outlook. Merck now expects full-year sales to be between $59.7 billion and $60.2 billion, including a negative impact of foreign exchange of approximately 2 percentage points, at mid-October 2023 exchange rates. This full-year outlook includes approximately $1.3 billion of LAGEVRIO sales. Merck’s full-year non-GAAP effective income tax rate is expected to be between 39.0% and 40.0%, which includes an approximate 24.5 percentage point negative impact related to business development activity. Merck now expects its full-year non-GAAP EPS to be between $1.33 and $1.38, including a negative impact of foreign exchange of approximately 6 percentage points, at mid-October 2023 exchange rates.

Tailwinds

  • Strong sustained demand for key growth products, particularly in oncology and vaccines.
  • Raising and narrowing its full-year sales outlook.
  • Full-year outlook includes approximately $1.3 billion of LAGEVRIO sales.

Headwinds

  • Negative impact of foreign exchange of approximately 2 percentage points on full-year sales.
  • Full-year non-GAAP effective income tax rate includes an approximate 24.5 percentage point negative impact related to business development activity.
  • Negative impact of foreign exchange of approximately 6 percentage points on full-year non-GAAP EPS.

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 2023

Historical avgQ3 2023

-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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