(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.
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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.