MW Merck absorbs $200 million in tariff costs into its earnings and full-year outlook

By Tomi Kilgore

Drugmaker's stock gains as quarterly profit and sales extend a long string of beats and full-year outlook is kept intact

Shares of Merck & Co. were headed higher in early Thursday trading, after the drugmaker extended its long streak of quarterly earnings beats and held firm with its full-year outlook despite expected tariff costs.

The company saw first-quarter pharmaceutical sales fall from a year ago, however, as declines in vaccine sales offset growth in cancer and diabetes treatments.

The stock $(MRK)$ advanced 1.8% in premarket trading. That put it on track for a weekly gain, which would snap a six-week losing streak that took the stock to a three-year closing low of $76.46 on April 16.

Merck said it still expects 2025 total sales to be between $64.1 billion and $65.6 billion.

Although the company lowered its full-year outlook for adjusted earnings per share to between $8.82 and $8.97 from between $8.88 and $9.03, that was only because the new guidance included an expected one-time charge of about 6 cents per share related to a license agreement with China-based Hengrui Pharma.

Merck said its 2025 outlook absorbs an estimated $200 million in additional costs for tariffs that have already been implemented.

For the first quarter, Merck said net income rose 6.7% from the same period a year ago to $5.08 billion. And adjusted earnings per share, which excludes nonrecurring items, increased to $2.22 from $2.07, topping the average analyst estimate compiled by FactSet of $2.13.

Total sales were down 1.6% to $15.53 billion, but that was above the FactSet consensus of $15.35 billion.

Merck has now beat both bottom- and top-line expectations for 16 straight quarters, according to FactSet data.

Pharmaceutical sales decreased 2.6% to $13.64 billion, while animal-health sales rose 5.1% to $1.59 billion.

Among Merck's biggest sellers, cancer treatment Keytruda saw sales increase 3.7% to $7.21 billion amid increased use in earlier-stage indications, while sales of HPV vaccine Gardasil/Gardasil 9 dropped 41% to $1.33 billion, due primarily to lower demand in China.

The stock has tumbled 20.9% in 2025 through Wednesday, while the Health Care Select Sector SPDR exchange-traded fund XLV has slipped 1.3% and the Dow Jones Industrial Average DJIA, of which Merck is a member, has lost 6.9%.

-Tomi Kilgore

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April 24, 2025 09:17 ET (13:17 GMT)

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