NEW YORK (TheStreet) -- Drug company Merck (MRK) - Get Report reported fourth-quarter profits Wednesday that narrowly beat analysts' estimates.

But revenue fell more than 7% year over year, missing Wall Street projections by $30 million, and Merck forecast that full-year 2015 revenue would fall more than 5% year over year. For now, investors should avoid this stock.

Merck shares, which closed Tuesday at $61.02, are up 7.4% year to date, outperforming both the Dow Jones Industrial Average and the S&P 500, which are down 0.88% and 0.43%, respectively.

Merck's gains are not likely to hold, however. The stock will be under pressure for the next couple of quarters, because of Merck's 2015 guidance.

It doesn't help that Merck is trading at a premium to two large rivals. Its price-to-earnings ratio is 33, which is 16 points higher than GlaxoSmithKline's (GSK) - Get Report and 11 points higher than Pfizer's (PFE) - Get Report .

For the quarter ending in December, the pharmaceutical company said it earned $2.54 per share. Earnings, adjusted for one-time gains and costs, were 87 cents per share, beating the average estimate from analysts by a penny. Fourth-quarter revenue, which missed estimates by $30 million, was down more than 7% year over year to $10.48 million.

"Our stronger focus has led to better, consistent execution, and our results in 2014 demonstrate the significant progress we've made in evolving the company to better serve health care markets around the world," said CEO Kenneth C. Frazier, in a statement.

Although Merck's mixed fourth-quarter results were priced into its 2015 stock performance, which has bested the border markets, the company's guidance, which fell below analysts' estimates, wasn't.

Citing the negative impact of the stronger dollar, Merck said it expects full-year 2015 earnings of $3.32 to $3.47 per share, excluding special items. Analysts were looking for EPS of $3.49 per share.

Like most U.S. companies that have guided cautiously, Merck says earnings will be impacted by foreign exchange factors. But not all those companies that have issued weak guidance are trading at such a high premium to their peers.

With Merck, which is in a midst of a transformation that involves divesting noncore assets and reducing expenses, the best thing for investors to do is to trim some of their positions, diversify into other sectors and wait for Merck to execute on its value-creation goals.

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This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.