--- title: "Dow 30 Earnings: Merck First Quarter 2019" description: Dow 30, Merck & Co., MRK, first-quarter 2019 earnings of $1.12 a share, versus $0.27 in comparable period 2018. The improvement driven by reduced R&D costs image: https://investor.valueline.com/hubfs/VL%20Blog%20Images/iStock-506712124.jpg --- [![The Value Line Blog](https://investor.valueline.com/hubfs/VL%20Blog%20Images/vl_blog_header.png)](https://investor.valueline.com/blog) [Stock Highlights](https://investor.valueline.com/blog/topic/stock-highlights) # Dow 30 Earnings: Merck First Quarter 2019 April 30, 2019 New Jersey-based drugmaker and Dow-30 component **Merck** ([MRK ](https://research.valueline.com/research?&_ga=2.187596072.1836928298.1556637853-501788759.1556637853#sec=company&sym=MRK)– [Free Merck Stock Report](https://research.valueline.com/api/report?documentID=2185-VL_20190405_VLIS_mrk_X_01-4HR7KO5QS26F67NFA0F8DH84HJ&symbol=MRK)) reported first-quarter GAAP earnings of $1.12 a share, versus $0.27 in the comparable period of 2018. The sharp year-over-year improvement was driven primarily by reduced R&D costs (-40%), as last year's figure was inflated by a $1.4 billion charge related to a collaboration with Eisai Co., Ltd. That said, a nice uptick in revenues and lower taxes also provided support to the bottom-line comparison. Meantime, adjusted earnings, which exclude one-time gains, losses, and other nonrecurring items, and are more closely followed by Wall Street, came in at $1.22 a share, versus $1.05 in Q1, 2018. The adjusted figure soared past consensus expectations of $1.06, highlighted by a strong beat in the Gardasil vaccine franchise, and management responded by raising its full-year guidance (more below). Shares of MRK were trading 2% higher on the release. In the March period, worldwide revenues advanced 8% year over year, to $10.8 billion, marking the company's sixth-consecutive quarter of top-line growth. Performance continued to be fueled by strong momentum in standout immunotherapy drug Keytruda, where sales surged 55% year over year, to $2.27 billion. While the tally fell a hair below Wall Street's lofty $2.33 billion target, it still topped the $1.8 billion brought in by key rival Opdivo, made by **Bristol-Myers Squibb **([BMY](https://research.valueline.com/research?&_ga=2.255268360.1836928298.1556637853-501788759.1556637853#sec=company&sym=BMY)). In terms of total sales, Keytruda has emerged as a clear favorite in the high-growth immuno-oncology space and has also established a dominant position in the most lucrative segment in the market, lung cancer. Current projections suggest that annual sales could top $12 billion by 2024. Although Keytruda remains the top headliner, Merck is also seeing nice gains in other areas of its business. As mentioned above, Gardasil provided much of the upside versus consensus targets in Q1 (+27% year over year, to $838 million), aided by the ongoing commercial launch in China and improved uptake trends in Europe. The drugmaker also posted 20%-plus gains in newer assets including Proquad (+27%) and Bridion (+25%), which helped partially offset softness in the blockbuster Januvia/Janumet diabetes franchise (-5%), a 4% pullback in the Animal Health business, and lingering generic pressure on cholesterol-lowering drugs Zetia/Vytorin (-50%). For full-year 2019, management upped its adjusted earnings guidance to $4.67-$4.79 a share (previously $4.57-$4.72) and its revenue forecast to $43.9 billion-$45.1 billion (previously $43.2 billion-$44.7 billion). The revised ranges imply year-over-year growth of 9% and 5%, respectively, at the midpoints, and were a welcome sign after the company's previous guidance was seen as a bit light. In our view, the bulk of the improvement is likely to come from continued development of Keytruda. While further gains in the lung cancer market will be a key catalyst (65% of U.S. sales), the drug has also piled up approvals to treat several other types of cancers which should provide additional avenues for growth going forward. All told, we continue to view Merck as a strong option for investors seeking participation in the large pharma space. The stock scores well across all of our proprietary risk metrics, and an above-average dividend yield (2.7%) also provides some downside protection. **About The Company:**[Merck & Co.](http://www.valueline.com/WorkArea/linkit.aspx?LinkIdentifier=id&ItemID=9698) is an international developer, manufacturer, and distributor of pharmaceuticals. Important product names include JANUVIA/JANUMET (type-2 diabetes); ZETIA/VYTORIN (hypercholesterolemia); GARDASIL (vaccine); KEYTRUDA (lung cancer); and REMICADE (arthritis). In 2014, the company made three significant acquisitions: Schering-Plough, Idenix Pharmaceuticals, and Cubist Pharmaceuticals.   - Michael Ratty *At the time of this article’s writing, the author did not have positions in any of the companies mentioned.* [![Register now for our free One Stock to Buy webinar](https://no-cache.hubspot.com/cta/default/2532383/5a80130b-f0ce-4bd8-acbd-f077f2232ec5.png)](https://cta-redirect.hubspot.com/cta/redirect/2532383/5a80130b-f0ce-4bd8-acbd-f077f2232ec5) ### Popular Posts Search Search Blog ### Topics - [Investing 101 (2)](https://investor.valueline.com/blog/topic/investing-101) - [Market Commentary (37)](https://investor.valueline.com/blog/topic/market-commentary) - [Stock Highlights (390)](https://investor.valueline.com/blog/topic/stock-highlights) - [Stock Market Today (2071)](https://investor.valueline.com/blog/topic/stock-market-today) Copyright 2026 Value Line, Inc. All Rights Reserved. Factual material is obtained from sources believed to be reliable and is provided without warranties of any kind. VALUE LINE IS NOT RESPONSIBLE FOR ANY ERRORS OR OMISSIONS HEREIN OR ANY DAMAGES OR LOSSES ARISING FROM ANY USE OF THE INFORMATION CONTAINED HEREIN. This blog is strictly for subscriber's own, non-commercial, internal use. No part of it may be reproduced, stored or transmitted in any printed, electronic or other form, or used for generating or marketing any printed or electronic publication, service or product. Officers, directors, or employees of Value Line, Inc. and its affiliates and subsidiaries, and EULAV Asset Management, may own stocks that are featured in this email. Nothing herein should be construed as an offer to buy or sell securities or to give individual investment advice. Value Line, the Value Line logo, The Most Trusted Name in Investment Research, “Smart research. Smarter investing.”, The Value Line Investment Survey, Timeliness, and Safety are trademarks or registered trademarks of Value Line, Inc. and/or its affiliates in the United States and other countries.