Merck Shares Fall As Revenue Miss Offsets Earnings Beat And Restructuring News

Merck (NYSE:MRK) posted second-quarter earnings above expectations but missed on revenue, prompting a roughly 4% intra-day drop in its stock. The company also unveiled a broad restructuring plan to enhance efficiency.

Earnings per share reached $2.13, topping the consensus of $2.03. Revenue came in at $15.81 billion, just below forecasts of $15.87 billion.

Sales of flagship cancer drug Keytruda rose 9% year-over-year to $8 billion, with no currency impact. However, revenue from Gardasil/Gardasil 9 vaccines dropped 55% to $1.1 billion, also unaffected by exchange rates.

The company announced a multi-year optimization strategy targeting $3 billion in annual savings by 2027, aimed at reinvesting in product development. A new restructuring plan approved in July includes job reductions across administrative, sales, and R&D units, along with facility consolidations.

Merck expects $1.7 billion in annual savings from the restructuring alone, largely realized by 2027. The company recorded $649 million in related charges during the quarter.

For 2025, Merck narrowed its adjusted EPS forecast to $8.87–$8.97, compared to a prior range of $8.82–$8.97 and a consensus estimate of $8.87. Revenue is expected to range from $64.3 billion to $65.3 billion, slightly narrower than previous guidance.