Golf Clap for Merck

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Merck (NYS: MRK) reported earnings on April 27. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended March 31 (Q1), Merck met expectations on revenues and met expectations on earnings per share.

Compared to the prior-year quarter, revenue grew slightly and GAAP earnings per share increased significantly.


Gross margins were steady, operating margins grew, net margins expanded.

Revenue details
Merck reported revenue of $11.73 billion. The 17 analysts polled by S&P Capital IQ wanted to see a top line of $11.82 billion on the same basis. GAAP reported sales were 1.3% higher than the prior-year quarter's $11.58 billion.

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Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.99. The 19 earnings estimates compiled by S&P Capital IQ averaged $0.98 per share. GAAP EPS of $0.56 for Q1 were 65% higher than the prior-year quarter's $0.34 per share.

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Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 65.6%, about the same as the prior-year quarter. Operating margin was 23.5%, 20 basis points better than the prior-year quarter. Net margin was 14.8%, 580 basis points better than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $12.27 billion. On the bottom line, the average EPS estimate is $1.04.

Next year's average estimate for revenue is $47.37 billion. The average EPS estimate is $3.81.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 2,711 members rating the stock outperform and 205 members rating it underperform. Among 716 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 676 give Merck a green thumbs-up, and 40 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Merck is outperform, with an average price target of $41.82.

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At the time this article was published Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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