Merck post earnings, shares fall

Merck

Despite posting a decent set of figures for the fourth quarter of 2009 this morning, Merck KGaA have missed analysts estimates, and, as such, have seen a slump in shares.

The group, which is based in Darmstadt, Germany, saw net income come in at 56.7 million euros for the period, with revenues up 5.9 percent to 2.03 billion euros. This put Merck's full year net income at 366.3 million euros, while turnover was up 2.1 percent to 7.75 billion euros. The mediocre earnings meant that the group not only missed analysts earnings estimates but also means they are paying a much lower dividend than last year.

Satisfied

According to Chairman Karl-Ludwig Kley the group is satisfied with the results, given the "overall circumstances of last year." He noted that for 2010, Merck can anticipate revenue growth of between three and seven percent and an operating profit of between 20 and 30 percent. Kley did add, however, "it will be crucial for the economic recovery trend to remain stable."

Last year, reports Pharma Times, the Merck Serono unit contributed 5.35 billion euros, an increase of 6.6 percent. Driving that growth were sales of the multiple sclerosis drug Rebif (interferon beta-1a) which rose 15 percent to 1.54 billion euros, while the colorectal/head and neck cancer drug Erbitux (cetuximab) climbed 23 percent to 697 million euros.

Moving forward, the company hopes that its multiple sclerosis drug cladribine will be the first oral product for the disease to hit the market - though this plan has been rocked by moves by the US Food and Drug Administration (FDA), who issued a "refuse to file" letter stating that the application for cladribine remained incomplete.

In the meantime, Merck have proposed a dividend for 2009 of one euro per share, compared with 1.50 euros in 2008, which - coupled with the earnings post - hasleft a sour taste in many investors' mouths this morning.

Share are now down 6.7 percent (09:40 GMT).

Matthew Buttell

Matt Buttell graduated from Bath Spa University in 2006. Since then he has written for several publications, before moving to the web. He now writes solely for the internet, continuing to cover key business issues while managing his own personal blog.

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