Merck lowers profit outlook, partly due to $200 million expected tariff hit

Core Viewpoint - Merck has lowered its full-year profit guidance due to estimated costs from tariffs and a one-time charge related to a recent deal, impacting its adjusted earnings outlook for 2025 [1][4]. Financial Guidance - The company now expects adjusted earnings for 2025 to be between $8.82 and$8.97 per share, a decrease from the previous range of $8.88 to$9.03 per share [1]. - Merck reiterated its full-year sales forecast of between $64.1 billion and$65.6 billion [4]. Tariff Impact - The expected tariff charge is primarily due to levies between the U.S. and China, with additional impacts from Canada and Mexico [2]. - The new outlook does not include the potential effects of President Trump's planned tariffs on pharmaceuticals imported into the U.S., which may lead to increased U.S. manufacturing investments by drugmakers [3]. Investment in U.S. Manufacturing - Merck has invested $12 billion in U.S. manufacturing and research and development, with plans to invest an additional$9 billion by the end of 2028 [3]. Recent Financial Performance - In the first quarter, Merck reported net income of $5.08 billion, or$2.01 per share, compared to $4.76 billion, or$1.87 per share, in the same period last year [6]. - The company earned $2.22 per share excluding acquisition and restructuring costs, surpassing the expected$2.14 [8]. Revenue Performance - Merck's revenue for the first quarter was $15.53 billion, a 2$15.31 billion [7][8]. Product Contributions - The company noted significant sales contributions from two recently launched drugs, Winrevair and Capvaxive, which are expected to help offset losses from its top-selling cancer therapy, Keytruda, set to lose exclusivity in 2028 [5].