Updated from 9:11 a.m, EDT

Merck's ( MRK) first-quarter earnings slipped from a year ago on slightly lower-than-expected revenue, but the drug giant's net income was a penny ahead of estimates and it guided second-quarter earnings higher.

Merck earned $1.62 billion, or 73 cents a share, in the first quarter compared with earnings of $1.71 billion, or 76 cents a share, last year. The year-ago quarter had $165 million of net income from discontinued operations; excluding that, first-quarter 2004 earnings rose 5% over last year and first-quarter per-share earnings rose 7%. Revenue rose 1% to $5.63 billion.

Analysts surveyed by Thomson First Call were forecasting earnings of 72 cents a share on revenue of $5.74 billion in the latest quarter. Merck guided its second quarter higher, saying it expects to earn 78 cents to 82 cents a share in the period, compared with the existing analyst consensus of 77 cents. The company also reaffirmed its full-year EPS guidance of $3.11 to $3.17. The Wall Street consensus is $3.13.

Recently, Merck's stock was down 45 cents, or 1%, to $46.05.

Merck said it was on track in its efforts to eliminate 4,400 jobs worldwide, noting that 3,800 of the employee dismissals have taken place through March 31. The job-reduction plan was announced in October; the cuts will be completed by year-end.

"With revenues soft and key franchises under pressure, we maintain our in-line rating," said James Kelly, of Goldman Sachs, in a brief Thursday research note to clients. The pressure is being exerted on the cholesterol drug Zocor, the osteoporosis treatment Fosamax and the arthritis/pain medication Vioxx. Kelly is one of 22 analysts tracked by Thomson First Call with a neutral view of the company. (He doesn't own shares; his firm has had an investment banking relationship with Merck in the last 12 months.)

If you liked this article you might like

Are Fund Managers Better Than Their Funds?

Are Fund Managers Better Than Their Funds?

Can Regional Brokers Keep Outperforming?

Can Regional Brokers Keep Outperforming?

Wyeth Deal's Big, but Pfizer Still Needs a Blockbuster

Wyeth Deal's Big, but Pfizer Still Needs a Blockbuster

Cosmetic Surgery Stocks Keep Stiff Upper Lip

Cosmetic Surgery Stocks Keep Stiff Upper Lip

For Abbott, Diversity Remains Paramount

For Abbott, Diversity Remains Paramount