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Merck tops estimates on Keytruda strength and narrows profit outlook, as it lowers estimated tariff hit
Merck on Thursday reported third-quarter earnings and revenue that topped estimates as it saw strong demand for its cancer immunotherapy Keytruda.
The drugmaker also narrowed its full-year profit outlook to reflect lower estimated tariff costs, among other factors. Shares of Merck closed flat on Thursday.
Sales of Keytruda topped $8 billion for the first time in a quarter, rising 10% from the same period a year ago. Revenue from the drug of $8.14 billion came in just slightly under the $8.24 billion analysts were expecting, according to StreetAccount estimates.
The results come as Merck slashes $3 billion in costs by the end of 2027, and prepares to offset revenue losses from the upcoming patent expiration of Keytruda in 2028.
The pharmaceutical giant now expects its 2025 adjusted earnings to come in between $8.93 and $8.98 per share. That compares with its previous outlook of $8.87 to $8.97.
Merck said that reflects several new items, including “lower estimated costs related to the impact of tariffs.” During the previous two quarters, the company included a $200 million estimated hit from tariffs that President Donald Trump has implemented to date, but not his planned pharmaceutical-specific levies. Merck did not disclose a new estimate for the cost of existing tariffs.
Merck said the guidance also reflects a benefit from an amended deal with AstraZeneca related to a pill for a specific genetic disorder, partially offset by costs tied to the company’s now-completed acquisition of Verona Pharma.
Merck expects revenue for the year to come in between $64.5 billion and $65 billion, narrowed on both ends from its previous guidance of $64.3 billion to $65.3 billion.
Here’s what Merck reported for the third quarter compared with what Wall Street was expecting, based on a survey of analysts by LSEG:
- Earnings per share: $2.58 adjusted vs. $2.35 expected
- Revenue: $17.28 billion vs. $16.96 billion expected
The company posted net income of $5.79 billion, or $2.32 per share, for the quarter. That compares with net income of $3.16 billion, or $1.24 per share, for the year-earlier period.
Excluding acquisition and restructuring costs, Merck earned $2.58 per share for the third quarter.
Merck raked in $17.28 billion in revenue for the quarter, up 4% from the same period a year ago.
Merck continued to see trouble with China sales of Gardasil, a vaccine that prevents cancer from HPV, the most common sexually transmitted infection in the U.S.
In February, Merck announced a decision to halt shipments of Gardasil into China beginning that month. In July, CFO Caroline Litchfield said the company will not resume shipments to China through at least the end of 2025, noting that inventories remain high and demand is still soft.
Gardasil generated sales of $1.75 billion for the quarter, down 24% from the same period a year ago due to lower demand in China. Still, that was in line with what analysts were expecting, according to StreetAccount.
Investors are eager for additional updates on Gardasil’s presence in China and any details from Merck on potential drug pricing deals with Trump as part of his controversial “most favored nation” policy. Trump has so far inked agreements with Pfizer, AstraZeneca and EMD Serono, the largest fertility drug manufacturer in the world, that aim to make their medicines easier for Americans to access.
In an earnings call on Thursday, Merck CEO Rob Davis said the company shares the Trump administration’s goal of “decreasing patient out-of-pocket costs for our products in the U.S. while at the same time realizing greater prices for our medicines and vaccines in countries that have not been paying fair value for the innovation we provide.”
Merck is “actively engaged” with the administration to achieve those efforts.
Pharmaceutical, animal health sales
Merck’s pharmaceutical unit, which develops a wide range of drugs, booked $15.61 billion in revenue during the third quarter. That’s up 4% from the same period a year earlier.
The increase in Keytruda was driven by higher uptake of the drug for earlier-stage cancers and strong demand for the treatment for metastatic cancers, which spread to other parts of the body, the company said.
Meanwhile, Merck’s newer drug Winrevair, which is used to treat a rare, deadly lung condition, recorded $360 million in sales for the quarter. Analysts had expected the medication to bring in $413 million, according to StreetAccount estimates.
Winrevair’s growth largely reflects higher uptake in the U.S. But it was partially offset by the timing of distributor purchases of the drug and lower net pricing in the country, mainly due to changes to Medicare prescription drug plans.
Merck’s animal health division, which develops vaccines and medicines for dogs, cats and cattle, posted nearly $1.62 billion in sales, up 9% from the same period a year prior. The company said that mainly reflects higher demand for livestock products.
Correction: Sales for Merck’s animal health division were up 9% from the same period a year prior. An earlier version misstated the percentage.
After the drop in gold price, Bitcoin price also fell.
Bitcoin fell below $77,000 in the global market, Bitcoin price fell by more than 13% in a week.
Bitcoin’s highest price in 6 months fell below $126,000, Bitcoin price has dropped by more than $49,000.
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The BSE Sensex is trading higher by 371 points, or 0.47%, at 81,090.24, while the NSE Nifty rises by 70 points to trade above 24,850 at 24,889.25.
Stock Market Today.
Market Updates Today: A day after the market crash following the Budget’s provision to hike Securities Transaction Tax (STT), the domestic equity market on Monday saw heightened volatility. After opening nearly flat, the NSE Nifty rose to the day’s high, then touched the day’s low before sharply recovering to trade at the day’s high of 25,093.
As of 3:16 pm, the BSE Sensex surged by 932 points, or up 1.13%, to 81,641.87 in the afternoon trade and the NSE Nifty rose by 267 points, or up 1.07%, to trade above 25,000 at 25,093.27. After opening nearly flat, the NSE Nifty rose to the day’s high, then touched the day’s low before sharply recovering to trade at the day’s high of 25,093.27.
Among the 30 Sensex shares, 25 stocks were trading in the green. Among the top gainers were PowerGrid, Adani Ports, BEL, Reliance, Mahindra & Mahindra, Larsen & Toubro, and IndiGo, rising by up to 7.91%. The laggards were Axis Bank, Infosys, Titan, TCS, and Trent, falling by up to 1.97%.
After opening nearly flat, at around 9:30 am, the BSE Sensex jumped by 350 points to 81,112.03 in the opening trade, while the NSE Nifty rose 91 points to trade above the 24,900 level at 24,910.85. However, the benchmarks gave up all gains and declined to day’s low amid heavy volatility.
Aakash Shah, technical research analyst at Choice Equity Broking Private Ltd, said, “Near-term sentiment remains cautious despite some support from domestic technical indicators. The broader market direction will largely be influenced by global equity cues, crude oil price movements, and institutional fund flows.”
On Sunday, the Nifty saw an aggressive sell-off after the Budget 2026 announcement to hike STT, plunging nearly 870 points from 25,440 to an intraday low of 24,571, before staging a partial recovery to close at 24,825.
“A strong bearish candle was formed, with the index closing decisively below the 200-day EMA, indicating a deterioration in trend strength. Immediate resistance is placed at 24,950–25,000, while key support lies in the 24,650-24,700 zone. The RSI slipped to 31, reflecting oversold conditions, while India VIX surged 10.73% to 15.09, highlighting elevated market volatility,” Shah said.
On Sunday, February 1, foreign institutional investors (FIIs) sold equities worth Rs 588 crore, while domestic institutional investors (DIIs) also remained net sellers, offloading shares worth Rs 682 crore, adding to the pressure on the market.
V K Vijayakumar, chief investment strategist at Geojit Investments Ltd, said, “Yesterday’s market selloff resulting in 495 point crash in Nifty was a knee-jerk reaction to the sharp increase in STT on F&O trades. This was not a revenue-raising measure, but a decision to discourage retail traders from complex F&O trading, in which 92% of them were losing money. This decision is in the interest of retail investors. But this decision impacted the market sentiments, which were already impacted by the decision to make no changes in the LTCGs tax, which a section of the market was expecting rather unrealistically.”
It is important to understand that the Budget is a growth-oriented Budget with fiscal prudence. The 10% nominal GDP growth projected in the Budget is achievable and has the potential to deliver around 15% earnings growth in FY27. The market will soon start discounting this positive. But it is possible that FIIs may continue to sell impacting the market. Retail investors should keep their cool and remain invested and continue to invest systematically. A significant upturn in the market may take time; perhaps a retreat from AI trade globally. We don’t know when this will happen. But we know that an earnings rebound is imminent in response to this growth oriented Budget. That is a clear positive, he added.
February 02, 2026, 09:34 IST
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Gold prices have fallen significantly in both local and international markets, with 10 grams now priced at Rs18,433 and a tola at Rs21,500.
The price per tola fell below Rs22,000, reaching Rs21,500, while 10 grams dropped to Rs18,433.
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