Merck & Co beats forecasts; profit up 2%

Troubled US drug major Merck & Co, which has suffered product revenue loss and litigation costs since its withdrawal of the COX-2 inhibitor Vioxx (rofecoxib) last September due to increased risk of heart attack and stroke with the drug, came up with a strong set of fourth-quarter and full-year 2005 results, which beat analysts' consensus forecast.

The company posted sales of $22.0 billion for the year, a drop of 4%, and $5.77 billion for the quarter, which was virtually unchanged on the like, year ago period and included a 1% unfavorable foreign exchange impact for both reporting terms. Net income was down 29% for the year at $4.63 billion, or $2.10 per share, but rose 2% to $1.12 billion, or $0.51 a share, for the fourth quarter. Merck said it had made additional reserves of $295.0 million for Vioxx legal defense cases, bringing the total set aside to $970.0 million. Excluding charges for restructuring and taxes of repatriation of foreign profits, the group's earnings per share would have been $0.64.

"Merck's performances for the quarter and the full year were strong and serves as a platform for the future," said chief executive Richard Clark, adding: "we continue to believe we can generate compound annualized revenue growth, including 50% of the revenue from joint ventures...of between 4% to 6% through 2010." Merck anticipates first-quarter 2006 EPS of $0.62-$0.66, excluding restructuring charges and $2.28-$2.36 for the full year.