Third-quarter sales rose 5% to $18.1 billion, above the $17.3 billion analysts expected, helped by early government vaccine purchases. Adjusted earnings fell from a year earlier, and the shares rose about 4.5%.
Merck beat forecasts on Thursday. Part of the beat was borrowed from future quarters.
The drugmaker reported third-quarter worldwide sales of $18.1 billion, up 5%, or 4% excluding currency, against the $17.3 billion analysts polled by LSEG expected. Keytruda, including Keytruda Qlex, had sales of $8.6 billion, up 6%, against an estimate of $8.0 billion. Qlex contributed $830 million. Winrevair nearly doubled to $694 million.
Adjusted earnings were $2.49 a share, down from $2.58 a year earlier but well above the $2.08 analysts expected. Both GAAP and adjusted figures include a 12-cent one-time charge for a licensing deal. The gross margin narrowed to 72.9% from 77.7%.
"I'm increasingly confident in our ability to deliver long-term value for patients and shareholders," said Robert Davis, the chief executive.
The timing
About $550 million of the quarter's growth came from purchases made earlier than expected, the company said, according to Reuters. Sales of the Gardasil vaccine rose 14% to just under $2 billion, helped by early purchases by the Centers for Disease Control and Prevention.
Without the $550 million, sales would have been about $17.6 billion, still above the estimate, and growth would have been about 2%, by our arithmetic. That changes the picture. The beat is real, but the underlying growth rate is much slower than the headline.
The outlook
Merck raised the bottom of its 2026 sales forecast, which is now $66.8 billion to $67.3 billion, from a low end of $66.3 billion. Raising the floor after a quarter that pulled sales forward suggests confidence that the timing shift will not leave a hole the company cannot fill, though some of the fourth quarter's demand has already been booked.
The reaction
Merck shares rose about 4.5% to about $147.20 in early afternoon, from $140.93. Bristol-Myers Squibb, which also reported, was flat.
Strong quarter or early quarter?
The strong-quarter view: Keytruda and Winrevair both beat, Qlex is ramping, and the company raised its sales floor.
The early-quarter view: about $550 million was pulled forward, adjusted earnings fell from a year earlier, the gross margin narrowed, and the fourth quarter starts without those orders.
What to watch
Fourth-quarter Gardasil and Keytruda sales, the conversion of Keytruda patients to Qlex, gross margin, and Merck's 2027 guidance.