Merck beat Q2 estimates and raised its 2026 revenue outlook to $66.3-$67.3B, cutting profit guidance on a $5.7B Terns deal charge. Keytruda sales rose 5%.
Alpha Score of 40 reflects weak overall profile with moderate momentum, poor value, moderate quality, moderate sentiment.
Merck beat second-quarter estimates and raised its 2026 revenue outlook. The pharmaceutical company also cut its profit guidance, citing a $5.7 billion charge tied to its acquisition of Terns Pharmaceuticals.
Revenue for the quarter came in at $16.61 billion, up 5% from a year earlier and above the $16.01 billion analysts had expected, according to LSEG. The company now sees 2026 revenue in a range of $66.3 billion to $67.3 billion, up from a prior forecast of $65.8 billion to $67 billion.
Merck posted a net loss of $1.34 billion, or 54 cents per share, compared with net income of $4.43 billion, or $1.76 per share, in the year-earlier period. The loss reflected $5.7 billion in charges from the Terns deal and a separate $9 billion charge from the January acquisition of Cidara Therapeutics. Excluding those costs, the adjusted loss was 13 cents a share, narrower than the 18-cent loss analysts had projected.
Adjusted earnings guidance for 2026 now stands at $2.66 to $2.76 per share, down from $5.04 to $5.16. The drop is almost entirely due to the deal-related charges, Merck said.
Keytruda, Merck's top-selling immunotherapy, generated $8.37 billion in sales for the quarter, up 5% from a year ago and ahead of the $8.27 billion StreetAccount consensus. That total included $463 million from the newer injectable version, which the company is betting on to soften the revenue decline when the intravenous form loses patent protection in 2028.
Other newer products also posted strong gains. Winrevair, a treatment for a rare lung condition, brought in $588 million, up 75% and above the $565 million estimate. The pneumococcal vaccine Capvaxive contributed $184 million, up 42% from a year earlier.
Merck's animal health business reported $1.78 billion in sales, topping analysts' forecasts.
The company faces looming generic competition for the diabetes drugs Januvia and Janumet later this year, and for Keytruda in 2028. It has been acquiring assets to replenish its pipeline, including the recently approved PCSK9 pill for cholesterol. The Terns and Cidara deals are part of that push.
Prepared with AlphaScala editorial tooling from the source reporting linked above. Indexable analysis may include a cited Alpha Score value. Publishing checks screen each story before release. Educational coverage, not personalized advice.