Merck Tops Street Ahead of Schering Merger

WHITEHOUSE STATION, N.J. (TheStreet) -- As it grows closer to subsuming Schering-Plough(SGP Quote), Merck(MRK Quote) reported a third-quarter profit that surpassed Wall Street targets by a goodly margin on the back of strong diabetes drug sales.

Merck also recently unloaded its veterinary drug business Merial to Sanofi-Aventis(SAN Quote) for $1.7 billion in after-tax profit. Including those proceeds, the company booked earnings in the just-ended period of $1.61 a share, or $3.4 billion.

Stripping out those gains, the company posted adjusted earnings per share of 90 cents, better than the 82 cents that analysts were, on average, expecting.

Merck's $6.05 billion in third quarter revenue, up 2% from a year ago, is about even with the Wall Street target of $6.01 billion.

The company said that foreign currency exchange rates trimmed its revenue by 3% during the most-recent quarter.

Looking ahead, Merck updated its financial guidance for 2009, saying it expects to post earnings (excluding items) of $3.20 to $3.30 a share. Analysts had pegged a target of $3.23 a share for the company's full-year earnings.

Schering-Plough also released results Thursday, reporting declines in both revenue and profit. The company blamed a higher tax rate and higher research spending as well as currency exchange rates.

Another culprit: slumping sales of the cholesterol treatment it markets in partnership with Merck.

Schering-Plough, based in Kenilworth, N.J., said it earned $477 million, or 29 cents a share, on revenue of $4.5 billion.