Merck KGaA Fourth-Quarter Profit Rises 0.7% on Cost Cuts
Merck KGaA (MRK), the maker of the Erbitux cancer drug, said fourth-quarter profit rose 0.7 percent as restructuring helped offset the effect of currency swings.
Earnings before interest, taxes, depreciation and amortization excluding one-time items climbed to 795.2 million euros ($1.09 billion) from 789.8 million euros a year earlier, the Darmstadt, Germany-based company said today in a statement. Analysts had predicted 795.5 million euros, the average of eight estimates compiled by Bloomberg.
Profit this year will be at the same level as last year, when the company earned 3.25 billion euros, Merck said. Analysts predict 3.31 billion euros in profit for this year.
“We developed our business with innovative and highly specialized products and services further, expanding our presence in global growth markets,” Chief Executive Officer Karl-Ludwig Kley said the statement. “The numbers reflect this development. Merck was never as profitable as it is today.”
Merck is scouting acquisitions as it looks to expand in the U.S., Japan and China. It closed several sites, including the Swiss headquarters of its Serono prescription-drug business, and replaced a third of its top managers to save 300 million euros by this year.
Merck fell 0.8 percent to close at 125 euros in Frankfurt yesterday, giving the company a market value of 27.1 billion euros.
Revenue for the quarter fell 3.3 percent to 2.74 billion euros, matching the average analyst estimate. Sales were hurt by the euro’s increase against the dollar, yen and Latin American currencies.
Merck is particularly interested in cancer assets in the U.S. to rebuild its late-stage drug development pipeline. In the meantime it’s increasing investment in existing therapies such as cancer drug Erbitux and fertility products in emerging markets.
The company also is looking to buy brands to bolster its consumer health business in the categories of vitamins and supplements, cold and allergy and pain relievers.
Merck has been expanding outside of drugs after acquiring biotechnology-equipment supplier Millipore in 2010 for about $6 billion. The company agreed to buy AZ Electronic Materials SA (AZEM), a specialty chemicals supplier to the electronics industry, for 1.6 billion pounds.
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