Merck, Schering See Profits Rise

Merck & Co. said Monday that its third-quarter profit rose 7% as lower costs offset a revenue dip stemming from the loss of sales from Vioxx, the pain reliever the company withdrew last year.

Meanwhile, Schering-Plough Corp. said its profit more than tripled on strong sales as the company continued to march toward a turnaround.

Merck, which also makes Zocor for high cholesterol and the osteoporosis treatment Fosamax, reported net income of $1.42 billion, or 65 cents a share, compared with $1.33 billion, or 60 cents, a year earlier. That beat by 3 cents a share the consensus forecast of analysts surveyed by Thomson Financial.

In the third quarter of 2004, Merck took a charge of $141 million for costs related to withdrawing Vioxx. The drug was withdrawn after a study showed it doubled patients’ risk of heart attack and stroke after 18 months of use.

Merck, based in Whitehouse Station, N.J., reported an $80-million charge related to job cuts during the quarter.

Revenue slipped 2% to $5.42 billion from $5.54 billion.

Merck received a boost from sales of Singulair, a drug for asthma and seasonal allergies that saw revenue climb 11% to $692 million, but sales of Fosamax were flat and sales of Zocor, Merck’s No. 1 drug, fell 14% to $1 billion.

Merck said it expected earnings per share for 2005 to total $2.47 to $2.51, excluding charges. Analysts were forecasting earnings of $2.49.

Merck shares rose 82 cents, or 3%, to $27.

Schering-Plough, the maker of allergy medicine Nasonex, earned $43 million, or 3 cents a share, for the three months ended Sept. 30, compared with $14 million, or 1 cent, in the year-earlier period.

Revenue rose 15% to $2.28 billion from $1.98 billion.

After a charge for a research and development payment and a favorable tax effect, the Kenilworth, N.J.-based company earned 8 cents a share, beating analysts’ estimates.

Its shares rose 2 cents to $21.13.

Jason Napodano, an analyst at Zacks Investment Research, said he was impressed with Schering-Plough’s performance, noting that Chief Executive Fred Hassan said the company was seeking investment opportunities and wouldn’t grow dependent on the successful cholesterol-lowering franchise. Schering-Plough had faltered badly when it lost patent protection on its former top seller, Claritin.

“The quarter was OK, but I see no reason to buy the stock,” Napodano said.