Merck (MRK) Q3 2025 earnings

Merck On Thursday, it reported third-quarter earnings and revenue that beat estimates as it saw strong demand for its cancer immunotherapy Keytruda.

The drugmaker also narrowed its full-year earnings forecast to reflect lower estimated tariff costs, among other factors. Merck shares fell more than 2% in premarket trading Thursday.

Keytruda sales topped $8 billion for the first time in a quarter, up 10% from the same period last year. Revenue from the drug of $8.14 billion came in slightly below analysts’ expectations of $8.24 billion, according to StreetAccount estimates.

The results come as Merck cuts $3 billion in costs by the end of 2027 and prepares to offset revenue losses from Keytruda’s upcoming patent expiration in 2028.

The pharmaceutical giant now expects its 2025 adjusted earnings to range between $8.93 and $8.98 per share. This compares to its previous forecast of $8.87 to $8.97.

Merck said this reflects several new items, including “lower estimated costs related to the impact of tariffs.” Over the past two quarters, the company listed an estimated $200 million loss from the tariffs President Donald Trump has implemented so far, but not the prescribed drug duties. Merck did not reveal a new estimate of the cost of the current tariffs.

Merck said the guidance also reflects a benefit from a revised deal with AstraZeneca related to a pill for a specific genetic disorder, which was partially offset by costs associated with the company’s now completed acquisition of Verona Pharma.

Merck expects revenue for the year to be between $64.5 billion and $65 billion, which is down 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 to what Wall Street was expecting, based on a survey of analysts conducted by LSEG:

• EPS: $2.58 was revised from $2.35 expected
• profit: $17.28 billion versus $16.96 billion expected

The company recorded net income of $5.79 billion, or $2.32 per share, during the quarter. This compares to net income of $3.16 billion, or $1.24 per share, in the corresponding period a year earlier.

Excluding acquisition and restructuring costs, Merck earned $2.58 per share during the third quarter.

Merck achieved revenues of $17.28 billion during this quarter, an increase of 4% over the same period last year.

Merck has continued to see problems with sales in China of Gardasil, a vaccine that prevents cancer from human papillomavirus, the most common sexually transmitted infection in the United States.

In February, Merck announced a decision to halt Gardasil shipments to China starting that month. In July, Chief Financial Officer Carolyn Litchfield said the company would not resume shipments to China until at least the end of 2025, noting that inventories remain high and demand remains weak.

Gardasil achieved sales of $1.75 billion during the quarter, down 24% from the same period last year due to lower demand in China. However, that was in line with what analysts expected, according to StreetAccount.

During the earnings call, investors will likely look for additional updates on Gardasil’s presence in China and any details from Merck on potential drug pricing deals with Trump as part of its controversial “most favored nation” policy. Trump has so far signed agreements with Pfizer, AstraZeneca and EMD Serono, the world’s largest manufacturer of fertility drugs, which aims to make it easier for Americans to access their medications.

Merck’s pharmaceutical unit, which develops a wide range of drugs, generated revenue of $15.61 billion during the third quarter. This is 4% more than in the same period of the previous year.

Keytruda reported revenue of $8.14 billion during the quarter, up 10% from the same period a year earlier.

The company said this increase was driven by increased drug intake to treat early-stage cancer and strong demand for treating metastatic cancers, which have spread to other parts of the body.

Meanwhile, Merck’s new drug Winrevair, which is used to treat a rare and fatal lung condition, posted sales of $360 million during the quarter. Analysts had expected the drug to bring in $413 million, according to StreetAccount estimates.

Winrevair’s growth largely reflects rising uptake in the United States. But this was partially offset by the timing of distributor purchases of the drug and lower net prices in the country, primarily due to changes in Medicare prescription drug plans.

Merck’s animal health division, which develops vaccines and medications for dogs, cats and livestock, had sales of approximately $1.62 billion, up 16% from the same period a year earlier. The company said this mainly reflects high demand for animal products.