One-Time Costs Weigh on Merck’s Q2 Results (MRK)

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Drugmaker Merck & Co., Inc. ( MRK ) said Friday that its second quarter profit plunged 52% from last year, hurt by several one-time items, but adjusted profit beat analyst expectations.

The Kenilworth, NJ-based compared reported second quarter net income of $752.4 million, or 24 cents per share, compared with $1.56 billion, or 74 cents per share, in the year-ago period.

Excluding multiple one-time items, however, adjusted profit was a much-higher 86 cents per share, and revenue nearly doubled from last year, to $11.35 billion.

On average, Wall Street analysts expected a smaller adjusted profit of 83 cents per share, albeit on slightly higher revenue of $11.45 billion.

Looking ahead, the company forecast full-year earnings of 82 cents to $1.16 per share, or $3.29 to $3.39 on an adjusted basis. Analysts currently expect a full-year adjusted profit of $3.37 per share.

Merck shares fell 71 cents, or -2%, in premarket trading Friday.

The Bottom Line
Shares of MRK have a 4.34% dividend yield, based on last night's closing stock price of $35.06. The stock has technical support in the $32-$33 price area. If the shares can firm up, we see overhead resistance around the $38 price level. We would remain on the sidelines for now.

Merck & Co., Inc. ( MRK ) is not recommended at this time, holding a 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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Referenced Stocks: MERCK , MRK

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