Merck & Co. Inc., reeling from the recent withdrawal of its Vioxx arthritis drug, on Wednesday reaffirmed its 2004 earnings outlook but said earnings in 2005 will be lower than analysts had expected.
The company said it expects earnings in 2005 of between $2.42 and $2.52 a share. Analysts had on average expected 2005 earnings of $2.58 a share, according to Reuters Estimates. Merck's outlook excludes the establishment of reserves for potential Vioxx-related liability.
Merck's earnings are being hurt by the withdrawal in late September of Vioxx, which had annual sales of $2.5 billion, as well as by generic competition outside the United States for its Zocor cholesterol drug.
Merck expects sales of Zocor to decline to between $4.1 billion and $4.4 billion from expected 2004 sales of $4.9 billion to $5.1 billion.
The company said it expects its 2005 earnings to reflect growth in the company's newer products including its recently launched cholesterol drug Vytorin.
Sales of the osteoporosis drug Fosamax are expected to rise to $3.3 billion to $3.6 billion from expected 2004 sales of $3 billion to $3.2 billion. Sales of hypertension drug Cozaar are expected to rise to $2.9 billion to $3.2 billion from an expected $2.6 billion to $2.8 billion in 2004.
Merck said its earnings in the fourth quarter will range between 48 cents a share and 53 cents a share, including the impact of about $700 million to $750 million in lost sales of Vioxx and potential additional costs for the drug's withdrawal.
Merck said it expects full-year earnings per share of $2.59 to $2.64, which includes the expectation that the impact of the Vioxx withdrawal will hurt full-year earnings by 50 cents to 55 cents a share. Analysts had expected 2004 earnings of $2.61 a share, according to a poll by Reuters Estimates.