Merck

(MRK) - Get Report

posted flat earnings growth in the first quarter as the drugmaker continues to be hurt by competition from generic drugs.

First-quarter earnings totaled $1.63 billion, or 71 cents per share, compared to $1.66 billion, or 71 cents per share, last year. Earnings matched Wall Street expectations.

Revenue in the first quarter increased 7% to $12.2 billion from $11.35 billion in the year-ago quarter.

Late last year, Merck warned that 2002 would be a "transition" year of flat earnings growth after losing patent protection on four key drugs. The company said it expected new drug approvals to fuel the return of double-digit earnings growth in 2003. Merck reiterated that guidance Thursday, saying it expects second-quarter earnings of between 75 cents per share to 78 cents per share, in line with Wall Street expectations. Merck earned 77 cents per share in the second quarter of last year.

Back to the quarterly results, Merck said overall pharmaceutical sales decreased 2% in the first quarter. First-quarter sales of its arthritis drug Vioxx rose 25% to $650 million, compared to $485 million last year. Looking ahead, however, it said that 2002 Vioxx sales will be in the range of $2.8 billion to $3.1 billion, compared to $2.6 billion in 2001.

Merck's cholesterol fighter, Zocor, posted first-quarter sales of $1.6 billion, essentially flat with last year. The drugmaker says 2002 Zocor sales will reach a range of $7.1 billion to $7.4 billion, compared to $6.7 billion in 2001.

Merck has said it plans to cure its earnings ills with the submission of 11 new drugs for approval by 2006. But the marketing application for one of those drugs, the next generation arthritis drug Arcoxia, was pulled from the Food and Drug Administration in March so it could be expanded. The drugmaker has not set a date for when Arcoxia will be resubmitted.

Shares of Merck closed Wednesday at $55.05, near their 52-week low of $51.