The latest results beat Wall Street estimates. Merck shares rose 61 cents to $34.92 in afternoon trading.
"Three consecutive quarters of top and bottom line growth demonstrate our ability to consistently perform while at the same time making the strategic investments necessary for the future," CEO Kenneth Frazier told analysts on a conference call.
Total revenue of $12.02 billion was up 8 percent from a year ago, largely due to a 5 percent boost from favorable currency exchange rates, but was down from $12.15 billion in the second quarter.
Meanwhile, research spending was reduced 16 percent from a year ago, and Merck, based in Whitehouse Station, N.J., said it plans to cut total 2011 research spending to about $7.9 billion, down $400 million from its February forecast.
"That's not a cut that I want to see," said analyst Steve Brozak of WBB Securities. He said Merck's latest results appeared strong only in comparison to 2010's third quarter, "the worst quarter in the last two years."
The maker of
The year-ago results included continued restructuring charges from its $49 billion purchase of
Excluding more Schering-Plough acquisition and restructuring charges in the latest quarter, adjusted income was 94 cents per share, 3 cents per share higher than expected by analysts surveyed by FactSet. They typically exclude one-time items.
Like other drugmakers, Merck continues to suffer from U.S. and European government health programs reining in spending, generic competition to former blockbusters and other problems.
The company raised the lower end of its 2011 forecast, to a new range of $3.72 to $3.76 per share, excluding one-time items. Analysts expect $3.73 per share.
Analyst Erik Gordon of
"Merck could become the only recent megamerger in pharma that is actually working," he said. "Usually, the claims that a merger will create a stronger new product pipeline and reduced costs pan out as firing lots of people and overpaying for a pipeline that disappoints."
Merck said it expects revenue for all of 2011 to grow by mid-single digits from $46 billion last year. That would indicate most growth is coming from beneficial exchange rates and probably some price increases, Brozak said.
Prescription drug sales totaled $10.35 billion, driven by strong sales of Singulair, Januvia and combination diabetes drug Janumet,
Top seller Singulair saw sales rise 10 percent to $1.34 billion. It faces U.S. generic competition next August - the key reason for Merck's latest round of job cuts. It's already cut 4,000 jobs since December, to a total of 90,000 workers.
Januvia and Janumet sales both jumped more than 40 percent, to a total of $1.2 billion. They are among the most popular and fastest-growing diabetes pills. Merck recently got U.S. approval for Juvisync, the first combination pill targeting the millions of diabetics who also have high cholesterol.
Merck also got approval in Europe for a new birth control pill, Zoely, and has launched its new
Gardasil, a vaccine against cancer-causing human papilloma
Sales of biologic immune disorder drug Remicade fell 15 percent to $561 million, because Merck's revised revenue-sharing deal with
Merck is currently launching 15 products in various countries.
Sales of animal health products jumped 20 percent to $826 million. Consumer health sales edged up 3 percent to $421 million.