Germany's Merck Says 4th-Quarter Earnings Down 18 Per Cent, but Shares Rise on Bright Outlook
From Canadian Press DataFile (February 21, 2011)
BERLIN -- Fourth-quarter earnings at German drug and chemical maker Merck KGaA were down 18 per cent due to the effect of deferred tax assets, but the company cheered investors on Monday by issuing an upbeat forecast for this year and next.
Merck said it earned C46.5 million ($63.7 million) in the October-December period -- down from C56.7 million a year earlier, when the company saw favourable one-time effects on its tax rate. But revenues climbed by a quarter to C2.55 billion from C2.03 billion.
Merck's acquisition in July of Millipore Corp., a U.S. biotechnology equipment supplier, helped push up full-year revenues by 20 per cent, to C9.29 billion from C7.75 billion. Full-year net profit rose by nearly three-quarters, to C632.1 million from C366.3 million.
Along with Millipore, Merck was helped by high demand for liquid crystals, used in flat-screen televisions and computer monitors. Revenues from its liquid crystal business were up 17 per cent in the fourth quarter at C235 million and 38 per cent on the year at C1.01 billion.
CEO Karl-Ludwig Kley said it was ``a transformational year for Merck, with the acquisition of Millipore adding new capabilities, scale and innovative products.''
Merck, based in Darmstadt, said it expects revenues to increase by between 13 and 18 per cent in 2011, followed by further growth the year after.
It forecast that operating earnings -- which came in at C1.11 billion last year, an increase of 71.6 per cent -- will grow by between 35 and 45 per cent in 2011 and rise again in 2012.
Profit after tax also will improve, ``irrespective of potential exceptional items,'' Merck said.
Merck's shares were up 3.6 per cent in Frankfurt trading at C64.95 on the bright outlook, making them the strongest performer on the DAX index of blue-chip stocks.
Analysts had expected higher fourth-quarter net income of C87.7
million, but revenue beat their forecast of C2.48 billion.
Posted: February 2011