German drugs and chemicals company Merck KGaA reported a 15 percent rise in second-quarter operating profit on Wednesday thanks to rising sales of liquid crystals and multiple-sclerosis and cancer drugs.
Operating profit rose to 320.5 million euros ($510 million) from 277.5 million euros a year earlier, slightly missing the average estimate of 326 million euros in a Reuters poll of 15 analysts.
"Currency effects continued to have a considerable negative impact on total revenues," the company said in a statement.
Merck KGaA said total revenues grew organically by 12 percent but this was reduced by 6.1 percentage points due to translation of local currencies into the strong euro.
Sales of its cancer medicine Erbitux rose 24 percent in the second quarter, while sales of its multiple-sclerosis drug Rebif increased 2.8 percent.
Merck KGaA is also the world's largest supplier of the liquid crystal compounds used in televisions, mobile phones and computer laptops.
Liquid crystals sales rose 7 percent to 238 million euros, despite negative currency effects.
The operating profit margin for this business dipped to 45 percent in the quarter.
For 2008, Merck reiterated it expected group revenue to grow 5-9 percent and its operating margin -- excluding amortization and integration costs -- to be 23-27 percent.
Merck KGaA shares have fallen about 10 percent this year, roughly in line with the pan-European DJ Stoxx chemicals index and the drugs sector index, partly on worries over the impact of a slowdown in the U.S. economy.
According to Reuters data, Merck shares trade at 16 times estimated 2009 profit, a premium to the chemicals and drugs sectors' 12 times thanks partly to upbeat outlook for Erbitux.