(By Balachander) Merck & Co. Inc. (NYSE:MRK) reported better-than-expected quarterly earnings, spurred by gains from sale of its diabetes drugs and lower expenses. However, the drug maker's revenue fell shot of Wall Street projections.
On a non-GAAP basis, earnings per share (EPS) increased 7.6 percent to 99 cents, beating market expectations by a penny. GAAP EPS jumped 65 percent to 56 cents.
Sales edged 1.3 percent higher to $11.73 billion, slightly shy of consensus estimate of $11.82 billion on reduction in revenue from alliances and third-party manufacturing sales.
"We're continuing to drive double-digit growth of key brands like Januvia, Gardasil and Isentress, launch new products like Victrelis and achieve solid performance from our diverse businesses," CEO Kenneth Frazier commented.
Sales of diabetes drug Januvia soared 24 percent to $919 million, while revenue of Gardasil, Merck's human papillomavirus vaccine, jumped 33 percent to $284 million.
Research and development expenses dropped 14 percent to $1.86 billion.
Looking ahead for the full year, the company still expects non-GAAP EPS in the range of $3.75 to $3.85 on revenue to be at or near 2011 levels on a constant currency basis. Analysts expect EPS of $3.80 on revenue of $47.4 billion.
MRK shares, which have been trading in the 52-week range between $29.47 and $39.43, closed Thursday's regular trading at $38.47.