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Mar 31, 2023
Merck Q1 2023 Earnings Report
Merck's first-quarter results reflected focused execution of their science-led strategy, strong performance across key growth drivers, and continued momentum commercially and operationally.
Key Takeaways
Merck's first-quarter 2023 sales were $12.7 billion, a 10% decrease compared to the first quarter of 2022. GAAP EPS was $1.11 and non-GAAP EPS was $1.40.
First-quarter Pharmaceutical sales declined 10% to $12.7 billion, primarily due to lower sales in virology, largely attributable to LAGEVRIO, and diabetes, partially offset by growth in oncology, vaccines and hospital acute care.
Growth in oncology was largely driven by higher sales of KEYTRUDA, which rose 20% to $5.8 billion in the quarter.
Growth in vaccines reflects higher combined sales of GARDASIL and GARDASIL 9, which grew 35% to $2.0 billion, reflecting strong demand outside of the U.S., particularly in China, which also benefited from the timing of shipments and increased supply.
Animal Health sales totaled $1.5 billion for the first quarter of 2023, a 1% increase compared with the first quarter of 2022.
Merck
Merck
Merck Revenue by Segment
Revenue by Segment
Pharmaceutical Revenue
CapyFin.comAnimal Health Revenue
CapyFin.com Forward Guidance
Merck is raising and narrowing its full-year outlook ranges for sales and non-GAAP EPS. For GAAP EPS, Merck is lowering and narrowing its full-year outlook, attributable to a GAAP-only charge related to settlements with certain plaintiffs in the Zetia antitrust litigation.
Positive Outlook
- Merck continues to experience strong global underlying demand across its key pillars of growth.
- Merck now expects full-year 2023 sales to be between $57.7 billion and $58.9 billion, including a negative impact of foreign exchange of approximately 2 percentage points, at mid-April 2023 exchange rates.
- This full-year outlook includes expected sales of LAGEVRIO of approximately $1.0 billion.
- Merck's full-year effective income tax rate is expected to be between 17% and 18%.
- Merck is raising and narrowing its full-year 2023 non-GAAP EPS range to be between $6.88 and $7.00, including a negative impact of foreign exchange of approximately 4 percentage points, at mid-April 2023 exchange rates.
Challenges Ahead
- Includes approximately $1.0 billion of LAGEVRIO sales.
- Includes an aggregate $1.4 billion of R&D expenses related to the Imago acquisition and upfront payment for the license and collaboration agreement with Kelun-Biotech.
- Outlook does not assume the proposed acquisition of Prometheus or any additional significant potential business development transactions.
- Includes $0.52 of charges related to the Imago acquisition and upfront payment to Kelun-Biotech.
- Assumes a share count (assuming dilution) of approximately 2.55 billion shares.