Merck Profit Falls 29% on Vioxx Recall
Merck & Co.'s profit fell 29% in the third quarter because of costs for pulling its arthritis drug Vioxx from the market.
Merck earned $1.33 billion, or 60 cents a share, down from $1.86 billion, or 82 cents, a year earlier. Analysts surveyed by Thomson First Call had forecast profit of 71 cents. Revenue fell 4% to $5.54 billion from $5.76 billion despite a 3% boost from price increases and favorable exchange rates.
New Jersey-based Merck said lost Vioxx sales, estimated customer returns, unused inventory and recall costs slashed profit by $553 million. On Sept. 30, Merck said it was withdrawing Vioxx because a study found it raised risk of heart attack and stroke after 18 months of use.
Merck said fourth-quarter earnings per share would be 48 cents to 53 cents.
Many analysts had expected most Vioxx recall costs to come in the fourth quarter.
The company expects about $725 million in lost Vioxx sales in the fourth quarter, plus more possible recall costs.
Merck said that as of Oct. 15 it had been served with or informed of about 300 lawsuits, plus several potential class-action suits alleging Vioxx caused injuries.
Merck fell 14 cents to $31.26 on the New York Stock Exchange.