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Merck  (MRK) - Get Free Report posted better-than-expected third quarter earnings Tuesday, and improved its 2019 profit guidance as its key lung cancer treatment, Keytruda, saw sales top $3 billion.

Merck said non-GAAP earnings for the three months ending in September came in at $1.51 per share, topping the Street consensus forecast of $1.24 per share as group revenues slipped 6.7% to $12.4 billion but beat analysts' estimates of an $11.64 billion tally. Keytruda sales, Merck said, surged 62% to $3.1 billion.

Looking into 2019, Merck said it will narrow and raise its full-year earnings forecast to a range of $5.12 to $5.17 per share, well ahead of the Refinitiv consensus of $4.92 per share. 

"We achieved another quarter of strong revenue and earnings growth as we continue to realize the benefits of our sustained investment in research and development and our focus on commercial execution," said CEO Ken Frazier. "We are confident that the investments we are making now will allow us to convert cutting-edge science into medicines and vaccines of great benefit to patients and value to shareholders."

Merck shares were marked 1.4% higher at $83.29 each in early trading Tuesday, bumping its year-to-date gain to around 9%.

"Last week, the stock took a bit of a hit after competitor Bristol-Myers Squibb (BMY) - Get Free Report posted encouraging late-stage results from a late-stage study evaluating the combination of its Opdivo and Yervoy compounds in first-line lung cancer, a hotly contested indication for these drugmakers, Real Money's Bret Jensen, who described the third quarter report as "solid".

"Given Merck gets about 25% of its overall sales from its blockbuster oncology product Keytruda, this is always something to watch," he added. "However, Merck also saw fantastic growth from its Gardasil franchise which saw revenues rise 26% to over $1.3 billion."

 Jensen is long BMY.