The company reported a 14% decline in profit thanks to competition from generics, which sliced into sales of some of its more high-profile medicines. Furthermore, a less-than-favorable exchange rate also decreased overseas revenue.
Merck posted net income of $781 million, or 26 cents a share, in the fourth quarter, down from $908 million, or 30 cents per share, in the same period one year earlier. Revenue also dropped 4% to $11.32 billion, which fell short of analysts' expectations of $11.36 billion.
Despite this, the stock still hit $55.20 on Wednesday, its highest point in more than six years.In other news, Merck announced three separate collaboration agreements on Wednesday to quicken its cancer-immunotherapy program. TheStreet Ratings team rates MERCK & CO as a "buy" with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation: "We rate MERCK & CO (MRK) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, good cash flow from operations, expanding profit margins and solid stock price performance. We feel these strengths outweigh the fact that the company has had sub par growth in net income."
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV