Merck ( MRK) reported third-quarter earnings that were in line with expectations on Wednesday, factoring out a restructuring charge, but the drugmaker said it would continue its cost-cutting efforts and eliminate more jobs. The Whitehouse Station, N.J., company said it will cut its workforce by 12% as part of a new restructuring program that comes three years after a previous retooling at Merck. Shares of Merck closed at $29.97 on Tuesday and were down 3% in the premarket. Merck reported profit of $1.09 billion, or 51 cents a share, for the latest quarter, down from $1.53 billion and 71 cents a share in the year-ago period. On an adjusted basis, factoring out a 29-cent restructuring charge, the company said it earned 80 cents a share, compared with 75 cents a year prior. Sales decreased 2% to $5.9 billion, including a 4% benefit from foreign exchange. Analysts, on average, were looking for 79 cents a share on revenue of $5.98 billion. The company's job cuts will result in the reduction of 7,200 positions, including 6,800 active employees, by 2011. The company said about 40% of the jobs will be in the U.S.. The cutbacks come on top of the 10,400 positions eliminated in a 2005 restructuring plan. On Tuesday, Pfizer ( PFE) said it was continuing its cost-cutting initiatives as well, having trimmed its workforce by 3,600 in the third quarter. Merck expects its new restructuring program to create pretax savings of $3.8 billion to $4.2 billion from 2009 to 2013, and to cost between $1.6 billion and $2 billion by 2011.
The new program will cost between $250 million and $450 million on a pretax basis in the fourth quarter. Merck said it now projects adjusted earnings in the range of $3.28 to $3.32 a share for 2008, and between $3.45 and $3.55 after items are counted. Analysts surveyed by Thomson Reuters are looking for $3.28 a share on revenue of $24 billion. Pharmaceutical company Wyeth ( WYE) also announced its earnings Wednesday morning. Eli Lilly ( LLY) is due Thursday.