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Merck & Co.’s Quarterly Revenue Trend

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Merck’s revenue trend

Merck & Co. (MRK) reported revenues of $10.3 billion in 3Q17, a decrease of 2% compared to 3Q16. The decrease in revenues was driven by a 3% decrease in operating revenues, offset by a 1% favorable impact of foreign exchange. Wall Street analysts estimate that Merck will report revenues of $10.5 billion in 4Q17, a 3.7% rise compared to 4Q16.

The above chart compares the revenues for Merck & Co. over the last eight quarters. For 2017, Merck’s revenues are estimated at $40.2 billion, a 1.1% growth over 2016.

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Revenues in 3Q17

Merck’s revenues decreased 3% at constant exchange rates to $10.3 billion in 3Q17 due to lower sales of key products, including Gardasil, Januvia/Janumet, Isentress, and Zetia/Vytorin. The decrease in revenues was substantially offset by the increase in sales of its blockbuster drugs Keytruda and Zepatier. Its Animal Health segment reported growth in revenues in 3Q17.

Profit margins

Merck’s gross profit margin improved to 76% in 3Q17 compared to 75.3% in 3Q16. The increase was due to lower cost of sales during the quarter.

Its net profit margin improved 1.2% to 29.6% in 3Q17 compared to 28.4% in 3Q16. The increase was due to lower operating expenses during the quarter.

Wall Street analysts estimate Merck’s gross margin to be 75.7% in 4Q17 and its net profit margin to be 24.4%.

The VanEck Vectors Morningstar Wide Moat ETF (MOAT) holds 24.6% of its total investments in healthcare companies. It holds 2.3% in Merck (MRK), 2.3% in Amgen (AMGN), 2.4% in Pfizer (PFE), and 2.4% in Biogen Idec (BIIB).

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