Merck & Co., Inc. reports 3% rise in Q4 sales

Merck & Co., Inc. (NYSE:MRK) has released Q4 results

Merck
Merck

Pharmaceutical company Merck & Co., Inc. (NYSE:MRK) has released Q4 results today alongside full year results for the 2017 financial year. They show a rise in Q4 sales of 3%, with them increasing to $10.4 billion. This includes a 1% positive impact from foreign exchange. In the full year, they were up 1% to $40.1 billion.

EPS in Q4 was $(0.32), which reflected a $2.6 billion provisional charge related to US tax legislation. Excluding this charge, Q4 EPS was $0.98. This is ahead of the market consensus of $0.94.

For the full year, EPS was $0.93. This included the previously mentioned provisional charge related to US tax legislation, as well as a $2.35 billion charge related to the formation of a strategic oncology collaboration with AstraZeneca. Excluding these two charges, EPS for the full year was $3.98.

Merck’s 2018 financial outlook appears to be positive in my view. It is expected to report sales for the full year of between $41.2 billion and $42.7 billion. Around 1% of this rise is due to be from foreign exchange.

GAAP EPS for 2018 is expected to be between $2.97 and $3.12. Non-GAAP EPS is due to be between $4.08 and $4.23, which includes a 1% negative impact from foreign exchange.

In my opinion, Merck’s performance in 2017 was relatively strong. The company faced challenging trading conditions, so its performance when they are factored in seems to have been impressive.

Looking ahead, there could be scope for further growth according to the company’s guidance. The collaboration with AstraZeneca could also help Merck to generate improving returns while also helping to reduce overall risk to at least some extent.

The healthcare sector still offers a mix of strong growth potential as well as defensive appeal in my eyes. Therefore, I’m still bullish on the company’s outlook following the release of its Q4 results.

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Robert Stephens is a CFA Charterholder and works as an Equity Analyst. He is a keen private investor and has bought and sold stocks for 15 years, investing in a range of sectors and markets. He has previously written for Seeking Alpha and The Motley Fool, and now runs his own business. If you would like to contact Robert, please email info@investorsquawk.com or contact him via one of the other methods on the 'Contact Us' page