Merck (NYSE:MRK) shares moved higher in pre-market trading after the pharmaceutical company reported second-quarter 2026 results that exceeded Wall Street expectations and raised its full-year revenue guidance.
Although Merck reduced its adjusted earnings outlook to reflect acquisition-related charges, investors welcomed the stronger-than-expected quarterly performance and improved sales forecast.
Revenue and Earnings Beat Expectations
Merck reported a loss of $0.13 per share for the second quarter, outperforming analyst expectations for a loss of $0.27 per share.
Revenue reached $16.6 billion, representing 4% growth excluding the impact of foreign exchange movements and exceeding the consensus estimate of $16.41 billion.
Following the earnings release, Merck shares gained 1.4% in pre-market trading.
Key Products Continue to Drive Growth
Sales of Keytruda and Keytruda Qlex totalled $8.4 billion during the quarter, increasing 4% on a constant-currency basis.
The figure included $463 million in revenue from Keytruda Qlex, while sales of Winrevair climbed 75% on a constant-currency basis to $588 million.
Chairman and Chief Executive Officer Robert Davis highlighted the company’s continued execution and product momentum.
“We continued to make substantial progress across our business this quarter, driven by strong execution and growing contributions from new product launches,” he said.
Acquisition Costs Impact Earnings Outlook
Merck lowered its full-year 2026 adjusted earnings per share guidance to between $2.66 and $2.76, compared with its previous forecast of $5.04 to $5.16.
The revised outlook is broadly in line with the current analyst consensus estimate of $2.76 per share.
Management said the reduction reflects acquisition-related charges of $2.43 per share linked to the purchase of Terns. These include a one-time charge of $2.31 per share and approximately $0.12 per share in financing costs and investment associated with advancing MK-4208, previously known as TERN-701.
Company Raises Full-Year Sales Forecast
Despite lowering its earnings guidance, Merck increased its revenue outlook for the full year.
The company now expects worldwide sales of between $66.3 billion and $67.3 billion during 2026, compared with its previous guidance of $65.8 billion to $67.0 billion.
The updated forecast is also ahead of the analyst consensus estimate of approximately $66.89 billion.
Expenses Expected to Increase
Merck now expects its full-year gross margin to be approximately 81%, slightly below its previous estimate of around 82%.
The company also increased its operating expense forecast to between $42.0 billion and $42.7 billion, compared with its earlier guidance of $36.0 billion to $36.8 billion, primarily reflecting costs associated with the Terns acquisition and continued investment in its product pipeline.
Merck stock price
