Merck posts 57 percent profit drop

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TRENTON, N.J. (AP) – Drugmaker Merck & Co. on Tuesday posted a 57 percent drop in first-quarter profit, falling short of expectations and sending its stock down, as the global recession and other factors cut sales of its drugs and joint venture income.Last year’s quarter also benefited from a one-time pretax gain of $2.2 billion from Merck’s partnership with Britain’s AstraZeneca PLC.

Analysts called the quarter “disappointing” and “relatively weak,” with Seamus Fernandez of Leerink Swann telling investors Merck had a “top line whiff” of $460 million compared with his revenue forecast. Merck missed forecasts for nearly all of its drugs, analysts noted, and put future revenue in doubt by delaying plans to seek approval for a new migraine drug due to a safety issue.

Whitehouse Station, N.J.-based Merck said net income amounted to $1.43 billion, or 67 cents per share. A year ago, first-quarter net income was $3.3 billion, or $1.52 a share.

The maker of asthma and allergy drug Singulair and the Gardasil vaccine against cervical cancer reported revenue of $5.39 billion, down 8 percent from $5.82 billion.

Excluding charges totaling 7 cents, for restructuring and expenses related to its pending acquisition of Schering-Plough Corp., earnings per share were 74 cents. Analysts polled by Thomson Reuters were expecting, on average, 77 cents per share and of $5.77 billion.

Merck shares fell $1.49, or 5.9 percent, at $23.73 in midday trading.

The company said the strong dollar reduced global sales by 3 percent in the quarter, and generic competition for its blockbuster osteoporosis drug Fosamax pulled down sales by another 3 percent. Wholesalers reducing their inventories cut revenue an additional $75 million to $100 million.