Merck & Co. Inc.
) is set to announce its third quarter 2012 results on October
26, 2012, before the opening bell. The Zacks Consensus Estimate
for the third quarter is 93 cents per share, down 1.1% from the
year-ago earnings of 94 cents.
JOHNSON & JOHNS (JNJ): Free Stock Analysis
MERCK & CO INC (MRK): Free Stock Analysis
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Second Quarter Recap
Merck reported second quarter 2012 earnings per share (excluding
special items) of $1.05, 4 cents above the Zacks Consensus
Estimate and 10.5% above the year-ago earnings.
Revenues for the quarter increased 1.3% to $12,311 million, just
above the Zacks Consensus Estimate of $12,129 million. Revenues
were negatively impacted by both currency fluctuations and the
arbitration settlement agreement with
Johnson & Johnson
Agreement of Estimate Revisions
Of the 13 analysts following the stock, 3 analysts revised their
third quarter 2012 estimate upward, while 2 analysts have trimmed
their estimates in the last 30 days.
In contrast, 2012 estimates have witnessed a downward bias over
the last 30 days with 3 analysts raising estimates and 4 trimming
The last 7 days saw 1 analyst raising earnings estimates for the
third quarter of 2012. For 2012, a sole analyst trimmed the
We believe that concerns regarding the impact of the Singulair
patent expiry (August 2012) has led analysts to revise their
estimates downward for the third quarter of 2012. Singulair,
indicated for the chronic treatment of asthma and relief of
symptoms of allergic rhinitis, recorded $5.5 billion in sales in
2011. The product accounted for approximately 11.4% of total
revenues in 2011.
Meanwhile, the upward revisions in 2012 estimates reflect the
anticipated strong sales of Januvia/Janumet and new product
approvals like Victrelis as well as cost-cutting efforts.
Magnitude of Estimate Revisions
The Zacks Consensus Estimate for the third quarter of 2012
increased by a penny to 93 cents per share in the last 30 days.
The Zacks Consensus Estimate for 2012 remained stationary at
$3.81 per share in the past 30 days, which is slightly towards
the higher end of the earnings guidance range of $3.75 - $3.85
per share provided by the company. In the last 7 days, there was
no change in the Zacks Consensus Estimate for the third quarter
of 2012 and full year 2012.
Merck has consistently surpassed earnings estimates in the last
four quarters. The company recorded a maximum positive surprise
of 3.96% in the second quarter of 2012. On an average, the
earnings surprise was 2.86%.
We currently have a Neutral recommendation on Merck, which
carries a Zacks #3 Rank (short-term Hold rating).