Germany's Merck Lifted by Sigma-Aldrich Deal
May 19 2016 - 2:40AM
Dow Jones News
FRANKFURT—German chemicals and pharmaceuticals group Merck KGaA
said Thursday that net profit for the first quarter of 2016 more
than doubled, boosted in part by the integration of U.S. laboratory
equipment maker Sigma-Aldrich.
Net profit for the period ended March 31 was €591 million
($674.48 million), compared with €282 million during the same
period last year.
Earnings per share also more than doubled, to €1.36, but fell
short of analysts' forecasts. Analysts had expected EPS of €1.41,
according to a recent poll conducted by The Wall Street
Journal.
"The integration of Sigma-Aldrich is progressing quickly,"
newly-appointed Chief Executive Stefan Oschmann said.
The $17 billion deal, which closed in November 2015, was the
largest in Merck's history. The acquisition came as part of a
larger effort by the company's former CEO, Karl-Ludwig Kley, to
move the group away from its traditionally core pharmaceuticals
business and build up its specialty chemicals and life science
divisions.
Sales climbed by 21% to €3.67 billion, boosted primarily by the
integration of Sigma-Aldrich.
The company's closely watched earnings before interest, taxes,
depreciation and amortization before one-time items jumped by 27%
to €1.08 billion, a result of strong growth at the health care and
life sciences division, as well as the Sigma-Aldrich
integration.
Ebitda before one-time items at the health care division, which
includes pharmaceutical and over-the-counter drugs, grew by 10%, to
€508 million. That was a result of both organic growth and the
conclusion of commission expenses related to the co-promotion of
multiple sclerosis drug Rebif with Pfizer Inc. in the U.S. However,
that blockbuster drug saw a slight sales decline due to increased
competition from generic alternatives.
At the life science division, Ebitda before one-time items more
than doubled to €393 million, mainly as a result of the
incorporation of Sigma-Aldrich into that unit.
Sales and earnings at the performance materials business, which
produces liquid crystals used in televisions and smartphones, were
flat.
Merck reiterated its guidance for the current year, saying it
expects sales to increase to between €14.8 billion and €15 billion.
The company said it anticipates Ebitda before one-time items
between €4.1 billion and €4.3 billion.
Write to Christopher Alessi at christopher.alessi@wsj.com
(END) Dow Jones Newswires
May 19, 2016 03:25 ET (07:25 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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