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KENILWORTH, N.J. (AP) — Sustained cost cuts helped push second-quarter profit at Merck up 61 percent, easily topping Wall Street expectations, as growing sales of new cancer and hepatitis C medicines offset growing competition that older drugs face from generics.
Still, Merck trimmed its profit expectations for the year, citing the cost of a major new cancer drug partnership with AstraZeneca and a cyberattack last month.
Merck disclosed that the attack had a significant impact on its manufacturing and other operations, from which it is still recovering. It said the magnitude of the disruption isn't clear yet.
Merck continues to restore its manufacturing operations while, at the same time, filling product orders. It anticipates some delays in shipping, but none for but not its three top medicine franchises, Keytruda, Januvia and Zepatier for hepaqtitis C. The company is restoring its active pharmaceutical ingredient operations, but is not yet producing bulk product. Research and sales operations also were affected.
Merck & Co. on Friday reported second-quarter net income of $1.95 billion, or 71 cents per share, up from $1.21 billion, or 43 cents per share, a year earlier.
Earnings, adjusted for one-time gains and costs, came to $1.01 per share, far above the 87 cents per share analysts were expecting, according to Zacks Investment Research.
The company, based in Kennilworth, New Jersey, posted revenue of $9.93 billion in the quarter, also above analyst projections for $9.79 billion.
Prescription drug sales edged up 1 percent, to $9.93 billion, though sales for top brand Januvia fell 8 percent amid rising competition and lower trending prices.
Keytruda sales jumped 180 percent, to $881 million, and Zepatier sales soared to $517 million from $112 million a year ago, just after Zepatier was launched.
Veterinary medicine sales climbed 6 percent, to $955 million.
Merck said it now expects full-year earnings in the range of $1.60 to $1.72 per share, down from the company's May forecast, for earnings between $2.51 and $2.63 per share, including one-time items. It expects higher revenue, though, in the range of $39.4 billion to $40.4 billion, up from its prior forecast of $39.1 billion to $40.3 billion.
Shares rose about 1 percent before the opening bell.
Elements of this story were generated by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research.
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