Merck Raises Profit Targets

Updated from 7:55 a.m. EDT

Merck's (MRK) second-quarter results easily beat Wall Street's estimates and the drugmaker dramatically raised its full-year targets, giving its shares a boost Monday.

New Jersey-based Merck boosted its 2007 earnings forecast to a range of $3 to $3.10 a share, excluding one-time charges, up from a projection of $2.75 to $2.85 announced in April. As recently as December, Merck was predicting only $2.51 to $2.59 a share.

Analysts polled by Thomson First Call had been expecting full-year earnings $2.93 a share, excluding items. Following the new range, shares of Merck jumped $3.43, or 7%, to $52.45 on heavier-than-average trading.

For the three months ended June 30, Merck earned 82 cents a share, excluding one-time charges, beating the consensus by 10 cents. Sales of $6.1 billion topped the mean estimate of $5.77 billion.

Once all items were counted, Merck earned $1.68 billion, or 77 cents a share, up from last year's profit of $1.5 billion, or 69 cents a share, on revenue of $5.77 billion. Charges in the second quarter related primarily to cutting payroll and closing plants.

"A broad range of our newer and established products delivered strong growth again during the second quarter," said Richard Clark, Merck's chairman and CEO. "Our overall performance has positioned us well to achieve our business targets, meet the challenges that lie ahead, and continue to invest in drug discovery."

Sales of vaccines jumped to $1 billion from $349 million for the year-ago quarter thanks to strong sales from new products, especially Gardasil, which prevents a virus that causes cervical cancer, and Rotateq, which protects children from a vicious gastrointestinal disease. Gardasil contributed $358 million in the second quarter, and Rotateq accounted for $119 million.