For the first quarter, Merck expects to earn 62 cents to 66 cents a share before restructuring charges. Analysts were forecasting 64 cents a share. Merck also reaffirmed its full-year EPS target of $2.28 to $2.36, excluding items. Analysts were calling for $2.33 a share. "The risk to the shares is the Vioxx liability," says Barbara Ryan of Deutsche Bank Securities, in a Tuesday research note. "However, shareholders are currently being compensated with a 5%-plus dividend yield, which is secure." Ryan says her buy rating is based in part on Merck's previously announced "aggressive but achievable strategic plan" that includes cutting costs, closing some plants and focusing research and development efforts. The company has "a new sense of urgency and accountability," says Ryan, who doesn't own shares and whose firm doesn't have an investment-banking relationship with Merck. Merck enters 2006, knowing that its best-selling drug, Zocor, will lose its U.S patent by midyear. The cholesterol drug has been losing patent protection in foreign markets, which played a role in an 18% drop for fourth-quarter 2005 sales to $1.07 billion. For all of 2005, Zocor produced $4.38 billion in sales, down 16% from 2004. The Fosamax family of osteoporosis drugs recorded worldwide sales of $3.19 billion last year, up 1% from 2004, but fourth-quarter sales were down 5% to $789 million as generic competition overseas took its toll. Last year, the asthma medication Singulair gained 13% to $2.98 billion, and sales of the Cozaar/Hyzaar hypertension drugs gained 8% to $3.04 billion. Merck also derives income from several joint ventures. The biggest is its deal with Schering-Plough ( SGP) to market two cholesterol drugs. One is for Zetia, made by Schering-Plough, and the other is Vytorin, which combines Zetia and Zocor. Merck said the joint venture's net sales -- it doesn't identify sales or profit for each company -- was $2.43 billion last year, or double the $1.19 billion in 2004.