) reported first quarter 2013 earnings per American Depositary
Receipt (ADR) of $2.79, up 28.1% year over year.
Revenues for the reported quarter were up 4.4% year over year
with currency movement adversely affecting revenues by 1.4%.
Segment Sales in Detail
The company operates under four divisions: Merck Serono,
Consumer Health Care, Merck Millipore and Performance Materials.
Merck Serono and Performance Materials were the biggest
contributors to the top line.
Merck Serono's revenues increased 3.5% in the reported quarter,
driven by strong performance in Europe. Rebif sales benefited
from price increases in the US and improved performance in
Europe. Erbitux sales grew organically by 6.6% in the reported
quarter. Merck Serono is expected to achieve moderate organic
sales growth in 2013.
The Consumer Health Care division's revenues increased 7.9%,
primarily due to strong performance in Europe. This division is
expected to achieve stable sales growth in 2013.
The Merck Millipore division's revenues went up 2.5%. Growth was
driven by the Process Solutions business unit. Merck Millipore is
expected to achieve moderate organic sales growth in 2013.
The Performance Materials division's revenues jumped 9% due to
strong demand for liquid crystals materials. This division is
expected to achieve stable sales growth in 2013. This division
has been seeing inventory buildup for the last several quarters
in the display industry value chain. Merck KGaA expects this to
be worked down in the latter half of the year.
Research and development (R&D) expenses grew 6.4%. The
increase was mainly due to R&D investments in Merck Serono
and Merck Millipore. Administration expenses and selling and
marketing expenses declined 2.7% and 3.1%, respectively.
Merck KGaA expects to achieve its 2014 targets in 2013 itself.
For 2013, Merck KGaA expects revenues in the range of €10.7-€10.9
billion. Earnings per share are expected in the range
Merck KGaA carries a Zacks Rank #3 (Hold). Currently,
Jazz Pharmaceuticals plc
Catalyst Pharmaceutical Partners Inc.
) look more attractive with a Zacks Rank #1 (Strong Buy).
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