Merck hikes Q3 net five-fold, but strong euro bites

27 October 2008 12:01  [Source: ICIS news]

LONDON (ICIS news)--Merck KGaA increased net profits more than five-fold to €200.1m ($250.1m) for a third quarter absent exceptional items related to the acquisition of Serono taken a year earlier but suffering from currency-hit sales and operating performance, it said on Monday.

A stronger than expected negative currency effect in the quarter and a narrowed full-year forecast, particularly for liquid crystals, helped drive shares in the Germany chemical and pharmaceutical down sharply in Frankfurt trading. 

They were trading down 9.29% at €58.95 at 12:50 local time (11.50 GMT). 

Reported revenues for the drugs to liquid crystals maker were 8.7% higher in the quarter at €1.89bn.

Organic revenues growth was 13.5%, the company said, but reduced by 4.8 percentage points due to the translation of local currencies into the Europe.

The third-quarter core operating results, Merck said, which excludes the amortisation of intangible assets and Serono integration costs from the operating results of continuing operations, was down 2.9% at €462m from the year-earlier quarter.

The as-reported operating result was up 6.1% at €309.3m from €291.5m in the year-earlier period.

Merck Serono sales were 14% higher at €1.24m although organic revenue growth was 17%. Consumer healthcare revenues were hit by currency effects but grew 7.4% to €111m.

Liquid crystal revenues were 12% higher in local currencies but flat as reported at €239m and the operating results was down 6% at €112m.

Performance and life science chemicals sales were up 3.7% at €302m and the operating results up 30% at €37m after restructuring costs were mainly taken a year ago.

Merck said it expected to meet its full-year guidance announced in February but narrowed the range towards the lower end of expectations.

Full year revenues growth of between 6% and 8% was expected, it said, and an operating return on sales of 23-25%.

Revenue growth for liquid crystals should be 5-6%, Merck said, against the earlier forecast of 5% to 10%.

Merck is the world's largest maker of the liquid crystals widely used in flat panel displays (FPDs) for TVs. 

($1 = €0.80)

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By: Nigel Davis
+44 20 8652 3214

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