Merck KGaA operates as a pharmaceutical, chemical and life science company that is engaged in innovative drugs and chemicals research and development. The company posted a fourth-quarter profit that increased by 0.7% due to restructuring that helped Merck KGaA counterbalance currency swings effects.
Merck KGaA made an official statement today, which was cited by Bloomberg: “We developed our business with innovative and highly specialized products and services further, expanding our presence in global growth markets. The numbers reflect this development. Merck was never as profitable as it is today.”
The company revealed that its earnings before interest, taxes, depreciation and amortization excluding one-time items rose from 789.8 million euros in 2012 to 795.2 million euros (1.09 billion dollars). According to data compiled by Bloomberg, this is slightly below the average analysts estimates that amounted to 795.5 million euros. The company revealed that it expects the same profit as last year, which was estimated to 3.25 billion euros. This forecast is a bit lower than analysts projections of 3.31 billion euros.
As reported by the Wall Street Journal, the Chief Executive Officer of the company Karl-Ludwig Kley said: “We lowered our costs faster than planned and drove the realignment of the group.”
The company is said to have been particularly attracted by U.S. cancer assets as it is trying to rebuild its late-stage drug development pipeline. In addition, it also increased its investments made in existing therapies such as Erbitux, which is a cancer drug, and also fertility products in emerging markets.
These decisions of the drug maker come at a turning point for the company, when Chief Financial Officer – Mr. Matthias Zachert – is leaving Merck in order to take the position of Chief Executive Officer at Lanxess AG. Mr. Zachert is expected to leave the company by May this year, which means Merck needs to find an appropriate successor for him, especially considering the fact that Mr. Zachert was a key figure in the restructuring of the company.
Merck KGaA fell 3.12% in Frankfurt by 14:18 GMT to trade at 121.10 euros, marking a one-year change of +10.00%. According to the Financial Times, the 23 analysts offering 12-month price targets for Merck KGaA have a median target of 123.00 euros, with a high estimate of 157.00 euros and a low estimate of 89.00 euros. The median estimate represents a -1.60% decrease from the previous close of 125.00 euros.
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