Updated from 12:17 p.m. EDT

Merck's ( MRK) chief executive said Monday that he will unveil a comprehensive plan for reducing expenses and improving efficiency at the drugmaker by the end of the year.

Richard Clark, who became CEO in May, didn't provide details in a telephone conference with analysts. He said Merck would offer a plan in mid-December plus "milestones and metrics that can be used to evaluate our progress against them."

The guidelines could feature different business models and practices, as well as cost-cutting, he added. The plan must take into account the impact of withdrawing the arthritis drug Vioxx 13 months ago and the ongoing damage from patent expirations. The biggest revenue hit will come in mid-2006 when the cholesterol drug Zocor loses U.S. patent protection.

Clark reiterated several stances taken by his predecessor Raymond Gilmartin. For instance, he said he wants to maintain the dividend at its current level and added that the payout remains secure. Clark doesn't see any benefit to making a giant acquisition, but he said small, targeted purchases are possible.

The comments came during Clark's first major address to analysts, just after Merck released third-quarter earnings that beat Wall Street's estimates. Sales, however, were slightly short of the consensus prediction and below the same period last year.

Merck earned $1.42 billion, or 65 cents a share, in the quarter, compared with $1.33 billion, or 60 cents a share, a year ago. Third-quarter sales fell 2% to $5.42 billion. On average, analysts surveyed by Thomson First Call expected earnings of 62 cents a share on sales of $5.45 billion.

At midafternoon, the stock was up 36 cents, or 1.4%, to $26.54.

Cholesterol Levels

For the full year, the company expects earnings of $2.47 to $2.51 a share, excluding charges. Analysts were predicting $2.49 a share. Merck's estimate excludes a 29-cent charge related to the company's repatriation of foreign earnings for domestic use under a tax law signed by President Bush last year.

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