On Wall Street, no big drug company earns as much sweeping neutrality as Merck ( MRK).

Maybe it's because Merck had four drugs -- for depression, diabetes, anxiety and asthma -- fail in late-stage clinical trials last year.

Maybe it's because some analysts are starting to sound alarms about growth rates of some important drugs.

Whatever the reasons, Wall Street's score card of Merck looks like this: On one side, three analysts say "buy"; on the other side, four analysts say "sell." In the bulging middle, 22 Merck-watchers say "hold."

So while analysts await the company's release of its financial results Thursday, it's hardly surprising that they are adhering closely to Merck's first-quarter earnings-per-share guidance of 71 cents to 73 cents. The consensus of analysts polled by Thomson First Call is 72 cents. The consensus for the year is $3.13. The company's full-year guidance is $3.11 to $3.17.

Merck managed to meet Wall Street's consensus expectations for the fourth quarter of 2003 with an EPS of 62 cents, but it missed consensus predictions in the two previous quarters.

For the three months ended March 31, Wall Street is looking for earnings of $1.61 billion, or 72 cents, on revenue of $5.74 billion.

For the same period last year, the company earned $1.71 billion, or 76 cents a share, on revenue of $13.4 billion. However, those figures include the pharmacy benefit management company, Medco, which was spun off as an independent company in August.

The first-quarter report should give analysts a more detailed look at how well cost-cutting and cost-controlling efforts are working. Last October, Merck said it would dismiss 4,400 workers through 2004. It also launched a new program for U.S. wholesalers that is designed to reduce fluctuations in inventories and improve efficiency in selling products.

Structural changes aside, most analysts say that among the big drug companies, Merck has the murkiest future. "Merck's depleted late-stage pipeline is several years away from fruition," said Barbara Ryan of Deutsche Bank Securities in a recent preview of Merck's prospects.

Even Merck's Feb. 10 signing of a deal with the Danish drug company H. Lundbeck to develop a sleep-disorders drug, Gaboxadol, isn't enough to move Ryan off her hold rating on the stock. Merck and Lundbeck will jointly complete the phase III clinical trials -- the final step before seeking Food and Drug Administration approval -- with Merck financing most of the remaining development efforts. The companies expect to seek FDA approval in late 2006 or early 2007.

Ryan's analysis of six major U.S. drug companies includes a category called "near-term catalysts," for both positive and negative news. Merck's chart has only one catalyst -- the lowest in the group -- which is the expected approval by the Food and Drug Administration of Vytorin, a cholesterol fighter developed with Schering-Plough ( SGP). Vytorin combines Merck's Zocor with Schering-Plough's Zetia.

Ryan said sales growth for two big products -- Zocor and the anti-inflammatory drug Vioxx -- "could be vulnerable." These drugs accounted for one-third of 2003's total sales, excluding revenue from Medco. Zocor loses U.S. patent protection in 2006 and is starting to lose patent protection in foreign markets. Vioxx got a boost three weeks ago when the FDA approved it as a treatment for migraine headache pain. The drug's major uses are for arthritis and acute pain.

And among the five drugs that Merck is relying on most for growth, Ryan said, only the asthma treatment Singulair was expected to provide a big first-quarter sales gain (26%). Quarterly growth rates for Vioxx, Zocor and the blood pressure drug Cozaar were expected to be 10% or less. Sales for Fosamax, which helps prevent bone loss, are expected to fall by 8%. (Ryan doesn't own shares; her firm says it plans to seek or receive investment banking compensation in the next three months.)

A more cheerful assessment of Merck comes from Girish Tyagi of Thomas Weisel Partners, who upgraded his rating to outperform from peer perform four weeks ago based on the stock's low price, the prospects for Vytorin and the hope for Arcoxia, a second-generation form of Vioxx. "These new drugs address sizable markets where Merck already has current products, solid market shares and effective sales teams," Tyagi said in a research report last month.

He anticipates Vytorin will reach the U.S. market early in the third quarter and that Arcoxia will be available in the fourth quarter. Vytorin has been approved in Mexico; Arcoxia is available in more than 40 foreign markets.

"While recent years have not been kind to Merck's pipeline or its stock, we believe 2004 is the year when Merck is set to shine," added Tyagi. (Tyagi doesn't own shares; his firm intends to seek or receive investment banking-related compensation from Merck within the next three months.)

A less cheerful view is advanced by Ken Kulju of Credit Suisse First Boston, who maintains an underperform rating on Merck.

Although he believes Merck should meet its first-quarter expectations, Kulju told clients in an April 1 report that he worries about the company's ability to make good on its full-year EPS guidance, because of increased pressure on its signature products. (He doesn't own shares; his firm says it expects to receive or sell investment banking-related compensation from Merck in the next three months.) Merck's "relatively thin research pipeline" and projected low EPS growth through 2007 leave shares "poorly positioned for earnings growth over the next three years," Kulju said.

Merck shares have underperformed in the last year; at $46.84, they are much closer to their 52-week closing low of $40.60 touched in November than their 52-week high of $63.50 last Summer.