Merck Posts 17% Gain on Strong 1st-Quarter Sales
Merck & Co.’s earnings rose 17% in the first quarter, more than expected, driven by strong sales of new arthritis drug Vioxx and cholesterol-lowering pill Zocor.
Merck reported net income of $1.5 billion, or 63 cents a share, up from $1.30 billion, or 54 cents per share, a year ago. The results beat Wall Street forecasts by 1 cent, according to First Call/Thomson Financial.
Revenue rose 17% to $8.85 billion.
Vioxx, introduced in the United States last May, had $370 million in sales. The drug is competing with Pharmacia’s painkiller Celebrex, which was launched five months earlier. Vioxx is now Merck’s third-biggest selling drug.
Zocor sales rose 19% to $1.16 billion despite tough competition from Warner-Lambert Co.’s Lipitor. Merck said some of the higher sales were attributed to wholesaler stocking ahead of a 4.5% price increase made last month.
Sales for the hypertension drug Prinivil rose 55% to $295 million.
Several Merck drugs had disappointing results. Sales of Crixivan, a protease inhibitor for treating HIV, fell 7%.
Despite heavy advertising, U.S. sales of the hair-growth drug Propecia fell 20% to $20 million. Global sales of Propecia rose 11% to $50 million.
Several drugs with approaching patent expirations also slipped, including the hypertension drug Vasotec, down 20% to $470 million, and cholesterol drug Mevacor, down 36% to $125 million.
Shares of Merck, which is based in Whitehouse Station, N.J., rose $2.19 to close at $72.94 on the New York Stock Exchange.
A Merck spokeswoman said the company forecast its earnings growth rate at 13% to 15% for all of 2000, in line with Wall Street forecasts.
At a Glance
Other earnings, excluding one-time gains or charges unless noted, include:
TECHNOLOGY:
* Akamai Technologies Inc. said its first-quarter loss widened to $35.4 million, or 47 cents a share, from $2.89 million, or 17 cents, a year ago, as marketing and research costs surged. The company, was expected to lose 40 cents a share, the average estimate of analysts polled by First Call/Thomson Financial. Akamai reported revenue of $7.2 million, contrasted with nil revenue a year ago.
* Buy.com Inc. said its first-quarter loss widened to $32.8 million, or 28 cents a share, from $19.3 million, or 22 cents, a year earlier, as it spent more on promotions, advertising and expansion. Analysts expected a loss of 29 cents. Sales jumped 92% to $207.6 million at the Aliso Viejo-based company ended the quarter with 2.4 million customer accounts, up from 500,000 a year ago.
* Drugstore.com Inc. reported a loss of 86 cents in the first quarter, excluding amortization of intangible assets and stock-based pay, a much lower loss than the $1.02 a share analysts expected. Including the charges, the loss widened to $49.5 million, or $1.09 a share, from $10.6 million, or $10.89 a share, a year ago. Sales surged to $22.7 million from $652,000.
* Exchange Applications Inc. said it had a profit of $1.34 million, or 5 cents a share, excluding amortization of a licensing agreement, up from a profit of $333,000, or 1 cent, a year ago, and a penny better than analyst forecasts. Sales surged 79% to $15.2 million.
* GoTo.com Inc. said its first-quarter loss including acquisition-related charges widened to $30.5 million, or 67 cents a share, from $7.36 million, or 68 cents a share, a year ago, as the company boosted marketing expenses. Excluding the charges, GoTo.com lost $9 million, or 20 cents a share, much better than the 33-cent loss analysts forecast. Revenue surged to $17.2 million from $1.45 million.
* Maxtor Corp. said first-quarter profit rose 63% to $27.6 million, or 23 cents a share, beating already increased forecasts of 15 cents, on strong sales of its more profitable large computer disk drives. Revenue rose 1.4% to $691.3 million.
* Priceline.com reported a narrower-than-expected first-quarter loss of $7.3 million, or 4 cents a share, contrasted with a loss of $16.8 million, or 12 cents a share, a year ago. Sales surged to $313.8 million from $49.4 million. Analysts expected a loss of 6 cents.
OTHER INDUSTRIES:
* American Express Co. had a 14% jump in profit to $656 million, or $1.44 a share, as the booming economy helped spur demand for its charge cards, financial and travel services. The results beat analyst estimates by 2 cents. Revenue increased 16% to $5.26 billion.
Profit in the card and travel unit increased 15% on a 16% jump in revenue as the company took in more fees and issued more cards. Earnings in the financial advisors business rose 15% as stock market gains and sales of investment accounts helped the company collect more fees on the assets it manages for customers.
* Railroad operator CSX Corp. said first-quarter earnings plunged 61% to $29 million, or 14 cents a share, 1 cent less than forecasts, because of higher fuel costs and continued congestion from the division of the former Conrail Inc. network last year. Revenue dropped 16% to $2.15 billion.
* Hartford Financial Services Group said first-quarter operating earnings increased 4% to $226 million, or $1.05 a share, exceeding analyst expectations of 98 cents, on growth in life insurance premiums.
* Corning Inc., the No. 1 maker of glass used in fiber-optic networks, said profit climbed 93% in the first quarter to $178.1 million, or 64 cents a share, from $92.5 million, as sales jumped 36% to $1.35 billion. The results far exceeded analyst expectations of 48 cents.
* Hershey Foods Corp. posted a 32% jump in first-quarter profit but warned that second-quarter earnings would be squeezed by additional costs to complete a distribution center. The candy maker said profit grew to $66.7 million, or 48 cents a share, from a year ago, exceeding the 44-cent average estimate of analysts surveyed by First Call/Thomson Financial. Individual estimates ranged from 39 cents to 48 cents. Revenue rose 9% to $993 million. Hershey didn’t say how much it expects the distribution center problems to hurt second-quarter results. Analysts are expecting earnings of 34 cents a share in the second quarter. * Lexmark International Group Inc. said first-quarter profit rose 18% to $80.2 million, or 59 cents a share, 1 cent better than forecasts; sales of its printers and supplies rose in all markets. Revenue increased 13% to $891.7 million.
* Newport News Shipbuilding Inc. said earnings grew 17% in the first quarter to $21 million, or 63 cents a share, as revenue rose 9.1% to $469 million. The performance exceeded analyst expectations of 59 cents. * Washington Post Co. said first-quarter earnings fell 47% to $23.6 million, or $2.50 a share, on higher expenses for its Internet sites and Kaplan Inc. education unit. The publisher’s revenue rose 5% to $546.8 million. Analysts were expecting it to earn $3.88 a share, the average estimate of five analysts polled by First Call/Thomson Financial.
* Safeco Corp. said its first-quarter operating earnings dropped 76% to $39 million, or 7 cents a share, as its underwriting losses more than tripled. The results beat estimates of 5 cents.
