Germany’s Merck Swings to Profit

Merck, Germany’s No. 4 drug maker, posted a fourth-quarter profit Thursday after a loss a year earlier, helped by sales of its colon cancer drug Erbitux and demand for liquid crystals used in computer screens and TVs.

Merck shares rose as much as 6.4% to a record high.

Net income was 81.5 million euros ($106.3 million), or 43 cents a share, contrasted with a loss of 36 million euros, or 20 cents, a year earlier, Darmstadt, Germany-based Merck said. Profit was below the median estimate of 98 million euros by 10 analysts surveyed by Bloomberg.

The company is focusing on heart medicines and cancer treatments, including the Erbitux drug it developed with New York-based ImClone Systems Inc., to make up for declining sales of its Glucophage diabetes drug.

It has also benefited from a surge in demand by Asian manufacturers, such as Samsung Electronics Co., for liquid crystals.

“We’re very happy about the development of Erbitux,” Merck Chief Executive Bernhard Scheuble said. “It exceeded our expectations.”

Regarding liquid crystals, “we remain extraordinarily optimistic. We are the world market leader, and we will at least keep that position,” he said.

The company -- which is not related to Whitehouse Station, N.J.-based drug maker Merck & Co. -- revealed for the first time its profit margin from liquid crystals, which generate just above 10% of its sales. It said the business earned a 51% operating return on sales, up from 50% a year earlier.

In comparison, the operating margin from pharmaceuticals, Merck’s biggest division and generator of about two-thirds of its overall sales, was 11%.

Shares of Merck rose 2.44 euros to 53.44 euros at the close of trading in Frankfurt.