What Does Wall Street See for Merck's Q2?

Seth Jayson, The Motley Fool
Updated

Merck (NYS: MRK) is expected to report Q2 earnings around July 26. Here's what Wall Street wants to see:

The 10-second takeaway
Comparing the upcoming quarter to the prior-year quarter, average analyst estimates predict Merck's revenues will expand 0.2% and EPS will increase 7.4%.

The average estimate for revenue is $12.17 billion. On the bottom line, the average EPS estimate is $1.02.


Revenue details
Last quarter, Merck reported revenue of $11.73 billion. 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
Last quarter, non-GAAP EPS came in at $0.99. 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.

Recent performance
For the preceding quarter, gross margin was 65.6%, about the same as the prior-year quarter. Operating margin was 24.7%, 140 basis points better than the prior-year quarter. Net margin was 14.8%, 580 basis points better than the prior-year quarter.

Looking ahead
The full year's average estimate for revenue is $47.18 billion. The average EPS estimate is $3.82.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 2,698 members out of 2,907 rating the stock outperform, and 209 members rating it underperform. Among 753 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 712 give Merck a green thumbs-up, and 41 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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The article What Does Wall Street See for Merck's Q2? originally appeared on Fool.com.

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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