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Merck Net Falls 90%, Hikes EPS Target

Merck said third-quarter net income fell 90%, but it raised the low end of its full-year per share earnings guidance.

NEW YORK (TheStreet) -- Merck (MRK) - Get Report said third-quarter earnings fell 90% but it raised the low end of its full-year per-share profit guidance, citing "solid" year-to-date performance.

Merck's updated full-year earnings guidance is in the range of $3.31 to $3.39 a share, vs. the previously expected earnings of $3.29 to $3.39. The company expects full-year revenue of $45.4 billion to $46.1 billion.

Analysts, on average, expect 2010 earnings of $3.36 a share on revenue of $45.58 billion.

The company said full-year Medicaid rebates could reduce revenue by about $170 million.

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Merck said third-quarter net income fell to 90% to $341.6 million, or 11 cents a share, from $3.42 billion, or $1.61, the previous year. The company said total costs associated with the company's global restructuring programs were $387 million in the third quarter vs. $117 million the year before. Merck also reported a negative impact of a $950 million legal reserve established in connection with a Vioxx drug investigation on by the U.S. Attorney's Office for the District of Massachusetts.

Non-GAAP EPS for the quarter was 85 cents vs. the consensus expectation of 82 cents. Sales rose 84% to $11.12 billion from $6.05 billion a year earlier. On average, analysts expected sales of $11.23 billion.

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-- Written by Andrea Tse in New York.

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