Merck & Co., Inc. (NYSE:MRK) reported fourth-quarter adjusted earnings per share (EPS) of $2.04, exceeding the consensus analyst estimate of $2.01 and reflecting a notable increase from $1.72 in the same quarter last year. The company’s revenues rose 5% year-over-year to $16.40 billion, surpassing estimates of $16.19 billion, highlighting sustained operational momentum through the quarter.
Examining sales by segment, Merck's pharmaceutical division achieved revenues of $14.84 billion, marking a 6% increase compared to the prior-year period. This growth was predominantly driven by rising demand in oncology treatments, alongside gains in cardiometabolic and respiratory categories. However, vaccine sales contracted, partially offsetting this advancement within the segment.
Within the Animal Health segment, revenues climbed 8% year-over-year to $1.51 billion. This increase was largely attributable to elevated demand for livestock-related products, indicating robust performance in this unit.
On the product front, Merck’s blockbuster immunotherapy cancer drug, Keytruda, generated $8.37 billion in global sales, representing a 7% increase year-over-year. Strong adoption globally in earlier-stage cancer indications and sustained demand in metastatic cases underpinned this growth. Conversely, the vaccine franchise including GARDASIL and GARDASIL 9 registered sales of $1.03 billion, a 34% decline relative to the previous year. This reduction was driven by lower demand in China coupled with decreased sales in Japan following the conclusion of a national catch-up immunization campaign.
The company’s diabetes portfolio, led by products JANUVIA and JANUMET, posted a 3% revenue increase to $501 million. Additionally, newer therapies such as Winrevair, targeting pulmonary arterial hypertension—a rare cardiovascular condition—more than doubled sales, reaching $467 million.
Addressing the company’s strategic direction, Chairman and CEO Robert Davis emphasized ongoing portfolio transformation supported by recent acquisitions of Verona Pharma and Cidara Therapeutics. He conveyed confidence in the trajectory of their strategic execution, noting that these initiatives are positioning Merck to deliver value to patients and shareholders alike.
Looking ahead to fiscal year 2026, Merck issued guidance anticipating adjusted earnings per share in the range of $5.00 to $5.15, below the consensus analyst forecast of $5.38. Revenue projections for the year were set between $65.50 billion and $67 billion, also falling short of the $67.59 billion consensus estimate.
Following the earnings release, Merck's shares rose 2.26% to $115.93, reaching a new 52-week high at the time of publication. This rally reflects investor reception amidst a mixed earnings report and tempered full-year outlook.
Overall, Merck demonstrated solid top-line and earnings growth in the final quarter, supported by strong product performance in oncology and animal health segments. Nonetheless, a noticeable pullback in vaccine sales and conservative fiscal 2026 guidance highlight areas of company focus and potential headwinds moving forward.
Examining sales by segment, Merck's pharmaceutical division achieved revenues of $14.84 billion, marking a 6% increase compared to the prior-year period. This growth was predominantly driven by rising demand in oncology treatments, alongside gains in cardiometabolic and respiratory categories. However, vaccine sales contracted, partially offsetting this advancement within the segment.
Within the Animal Health segment, revenues climbed 8% year-over-year to $1.51 billion. This increase was largely attributable to elevated demand for livestock-related products, indicating robust performance in this unit.
On the product front, Merck’s blockbuster immunotherapy cancer drug, Keytruda, generated $8.37 billion in global sales, representing a 7% increase year-over-year. Strong adoption globally in earlier-stage cancer indications and sustained demand in metastatic cases underpinned this growth. Conversely, the vaccine franchise including GARDASIL and GARDASIL 9 registered sales of $1.03 billion, a 34% decline relative to the previous year. This reduction was driven by lower demand in China coupled with decreased sales in Japan following the conclusion of a national catch-up immunization campaign.
The company’s diabetes portfolio, led by products JANUVIA and JANUMET, posted a 3% revenue increase to $501 million. Additionally, newer therapies such as Winrevair, targeting pulmonary arterial hypertension—a rare cardiovascular condition—more than doubled sales, reaching $467 million.
Addressing the company’s strategic direction, Chairman and CEO Robert Davis emphasized ongoing portfolio transformation supported by recent acquisitions of Verona Pharma and Cidara Therapeutics. He conveyed confidence in the trajectory of their strategic execution, noting that these initiatives are positioning Merck to deliver value to patients and shareholders alike.
Looking ahead to fiscal year 2026, Merck issued guidance anticipating adjusted earnings per share in the range of $5.00 to $5.15, below the consensus analyst forecast of $5.38. Revenue projections for the year were set between $65.50 billion and $67 billion, also falling short of the $67.59 billion consensus estimate.
Following the earnings release, Merck's shares rose 2.26% to $115.93, reaching a new 52-week high at the time of publication. This rally reflects investor reception amidst a mixed earnings report and tempered full-year outlook.
Overall, Merck demonstrated solid top-line and earnings growth in the final quarter, supported by strong product performance in oncology and animal health segments. Nonetheless, a noticeable pullback in vaccine sales and conservative fiscal 2026 guidance highlight areas of company focus and potential headwinds moving forward.