Merck’s Q3 Profit Plunges on Acquisition Costs (MRK)

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Drug maker Merck & Co., Inc. ( MRK ) on Friday said its third quarter profit plummeted 90% from last year, hurt by one-time charges related to its recent acquisition of Schering-Plough Corp.

The Whitehouse Station, NJ-based company reported third quarter net income of $341.6 million, or 11 cents per share, compared with $3.42 billion, or $1.61 per share, in the year-ago period. Excluding $2.3 billion in one-time charges, adjusted profit was 85 cents per share.

Revenue surged 84% from last year to $11.12 billion, aided by additional revenue from Schering-Plough.

On average, Wall Street analysts expected a smaller adjusted profit of 82 cents per share, albeit on higher revenue of $11.24 billion.

Looking ahead, the company boosted the low-end of its previously-announced full-year earnings guidance. Merck now expects adjusted 2010 earnings of $3.31 to $3.39 per share, while analysts expect $3.36 per share for the year.

Merck shares fell 29 cents, or -0.8%, in premarket trading Friday.

The Bottom Line
Shares of Merck ( MRK ) have a 4.11% dividend yield, based on last night's closing stock price of $36.94. The stock has technical support in the $32-$34 price area. If the shares can firm up, we see overhead resistance around the $38-$41 price levels.

Merck & Co., Inc. ( MRK ) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.4 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks , as well as a detailed explanation of our ratings system here .



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

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