(Updates with share price in ninth paragraph.)
Feb. 2 (Bloomberg) -- Merck & Co., the second-largest U.S. drugmaker, reported fourth-quarter profit that topped analyst estimates on higher sales of the Januvia diabetes drug. The company forecast 2012 earnings that matched estimates.
Net income was $1.51 billion, or 49 cents a share, compared with a loss of $531 million, or 17 cents, a year earlier when Merck took a $1.7 billion charge to write down the value of an experimental blood thinner, the Whitehouse Station, New Jersey- based company said today in a statement. Earnings excluding one- time items of 97 cents a share beat by 2 cents the average of 18 analyst estimates compiled by Bloomberg.
Merck forecast full-year earnings excluding one-time items of $3.75 to $3.85 a share, in range of analyst estimates of $3.84. The company is trimming jobs to reduce costs as it prepares for generic competition to the asthma medication Singulair, coming in August. Merck introduced a hepatitis C drug last year and is working on another.
“In terms of top line, it is a modest growth,” said Aparna Krishnan, an analyst at IHS Global Insight in London, in a phone interview. “They face lots of pressure in 2012. It is going to be very challenging.”
Revenue rose 1.7 percent to $12.3 billion, less than the analyst estimates of $12.5 billion.
Sales of Januvia for diabetes jumped 42 percent to $960 million, while revenue of the company’s human papillomavirus vaccine Gardasil increased 24 percent to $274 million.
Those gains were countered by a 16 percent decline in sales for the cholesterol drug Vytorin and a 28 percent drop for the arthritis drug Remicade. In July, Merck transferred exclusive Remicade marketing rights in South and Central America, the Middle East, Canada, Africa, and Asia Pacific to Johnson & Johnson.
“It was a decent fourth-quarter overall,” said Timothy Anderson, an analyst at Sanford C. Bernstein analyst in New York, in a note to clients today.
Merck fell less than 1 percent to $38.42 at 9:38 a.m. in New York trading.
Merck said that it expected 2012 sales to be “at or near” 2011 levels on a constant currency basis. Assuming current exchange rates, sales would decline 2 percent to 3 percent from 2011, the company said. Analysts had expected 2012 sales of $47.6 billion. The company said that research and development spending would be little changed in 2012.
In July, Merck said it would eliminate another 12,000 to 13,000 jobs by 2015, expanding a restructuring program that cut 11,500 positions in 2010.
--Editors: Angela Zimm, Bruce Rule
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