Merck Projects '09 Profit, Revenue Below Forecasts

Merck, which has been hobbled by waning sales of several big medicines, gave a 2009 earnings and revenue outlook below Wall Street forecasts in large part because of the stronger dollar.

AP

Its shares fell $1.30, or 4.9 percent, to $25.16 in premarket trading. Merck said it expected earnings, excluding special items, of $3.15 to $3.30 per share. Analysts polled by Reuters Estimates were expecting $3.52, on average. The 2009 forecast excludes restructuring charges of $400 million to $600 million.

Merck said it expects global sales next year of $23.7 to $24.2 billion, little changed from expected 2008 revenue and shy of the $24.7 billion Reuters Estimates forecast for next year.

Merck said the strengthening dollar would crimp 2009 revenue by 3 percentage points, while having a negative 6 percent impact on earnings per share.

On Wednesday, some analysts had predicted Merck would issue a conservative 2009 forecast, given the unfavorable foreign currency swing.

Revenue of U.S. drugmakers in recent years has been greatly bolstered by a weak dollar, which increases the value of overseas sales when converted back into U.S. currency.

But the stronger dollar has now thrown a headwind into company results.

Even so, Merck company stuck to its earlier long-range forecast of compound earnings per share growth in the mid-to-high single digit range from 2005 to 2010, excluding special items.

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