Merck $MRK cut its full-year profit forecast on Tuesday after charges tied to two acquisitions weighed on its bottom line, even as the company raised its sales outlook following a stronger-than-expected second quarter.
The pharma giant now expects adjusted earnings of $2.66 to $2.76 per share, down from a prior range of $5.04 to $5.16
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Merck $MRK cut its full-year profit forecast on Tuesday after charges tied to two acquisitions weighed on its bottom line, even as the company raised its sales outlook following a stronger-than-expected second quarter.
For all of 2026, Merck said it anticipates adjusted earnings per share landing between $2.66 and $2.76, a sharp pullback from its earlier guidance of $5.04 to $5.16. The revised forecast includes a one-time charge of $2.31 per share for the acquisition of Terns Pharmaceuticals, which closed in May, plus roughly $0.12 per share to finance that deal and advance Terns's cancer drug. It also incorporates a $3.62 per share charge from Merck's earlier acquisition of Cidara Therapeutics.
At the same time, Merck raised its full-year sales outlook to a range of $66.3 billion to $67.3 billion, up from $65.8 billion to $67 billion previously.
Merck recorded a second-quarter net loss of $1.34 billion, or $0.54 per share, swinging from net income of $4.43 billion, or $1.76 per share, a year ago. Stripping out deal-related and restructuring items, Merck's adjusted result came to a loss of $0.13 per share. Analysts had expected an adjusted loss of $0.27 per share, according to The Wall Street Journal.
A $5.7 billion acquisition charge tied to the Terns transaction, equivalent to $2.31 per share, was the primary factor behind the quarterly loss, the company said. R&D expenses rose to $9.7 billion from $4.0 billion a year earlier, largely due to that charge.
Quarterly revenue came in at $16.61 billion, a 5% rise year over year that cleared analyst expectations of $16.36 billion, according to CNBC.
Sales of Keytruda and its newer injectable form, Keytruda Qlex, together totaled $8.37 billion, up 5% year over year. Keytruda Qlex, a formulation patients receive via injection instead of an IV infusion, accounted for $463 million of the combined total.
Other products also showed growth in the quarter. Winrevair, Merck's pulmonary arterial hypertension therapy, brought in $588 million during the quarter, reflecting 75% growth compared with the prior-year period. Capvaxive, Merck's vaccine targeting pneumococcal disease, tallied $184 million in quarterly revenue, a gain of 42% over the same stretch last year. The company's animal health segment brought in $1.78 billion, an 8% improvement from a year earlier.
Merck also received FDA approval in July for Lipfendra, described by the company as the first once-daily oral PCSK9 inhibitor for reducing LDL cholesterol in adults with hypercholesterolemia.
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