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Merck Lowers 2025 Profit Forecast as Tariffs and Licensing Costs Weigh

Despite beating Q1 earnings expectations, Merck adjusted its annual EPS guidance downward due to $200 million in tariff costs and a one-time charge tied to a licensing deal.

Merck logo is seen in this illustration taken March 26, 2025. REUTERS/Dado Ruvic/Illustration
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Overview

  • Merck reported Q1 adjusted earnings of $2.22 per share, surpassing analysts' expectations of $2.14, with revenue reaching $15.53 billion, above the forecasted $15.3 billion.
  • The company revised its 2025 adjusted earnings per share guidance to $8.82–$8.97, down from the previous range of $8.88–$9.03, while maintaining its revenue forecast of $64.1–$65.6 billion.
  • Tariff-related costs, estimated at $200 million, and a one-time 6 cent per share charge linked to a licensing agreement with Hengrui Pharma were cited as key factors for the lowered outlook.
  • Sales of Gardasil, Merck’s HPV vaccine, fell 41% year-over-year to $1.33 billion following the suspension of shipments to China due to weak demand and regulatory challenges.
  • Merck highlighted growth in its animal health division, which posted a 5% increase in sales to $1.59 billion, and noted strong contributions from recently launched products like Winrevair and Capvaxive.