Merck raises 2026 non-GAAP EPS outlook after third-quarter beat

Merck raised and narrowed its 2026 non-GAAP EPS range on 29 October 2026 and now expects $2.77-$2.82, against $2.66-$2.76 before, according to its third-quarter results release. It absorbs a one-time $0.12-a-share SciBrunch licence charge that the company said the earlier outlook excluded. By Polstob's calculation, the midpoint rose by about $0.09, or about $0.20 before that charge. Merck said the new range includes a currency benefit of about $0.15 a share at mid-October exchange rates. Merck narrowed its sales outlook to $66.8bn-$67.3bn from $66.3bn-$67.3bn, raising the midpoint, lifted its non-GAAP operating expense range to $42.4bn-$42.9bn from $42.0bn-$42.7bn and lowered its expected non-GAAP tax rate to 32.0%-33.0% from 35.0%-36.0%. It kept its gross margin, other expense and share count assumptions unchanged.

Third-quarter sales rose 5% to $18.09bn from $17.28bn a year earlier, or 4% excluding currency effects. Merck said growth in its pharmaceutical business, where sales rose 4% to $16.27bn, benefited by about $550m from the timing of purchases. Non-GAAP EPS fell 3% to $2.49 from $2.58 and GAAP EPS 12% to $2.04 from $2.32; this year's figures include the $0.12 SciBrunch charge and last year's a $0.10 charge for a milestone payment to LaNova. Non-GAAP EPS was above the Zacks consensus of $2.12 from five estimates on Nasdaq.com, four of them revised down in the past four weeks; Nasdaq.com does not say whether they included the SciBrunch charge.

Keytruda and Keytruda Qlex sales rose 6% to $8.60bn, about 48% of total sales by Polstob's calculation, including $830m from Keytruda Qlex. Merck said the timing of wholesaler purchases hurt US Keytruda sales but was largely offset by more inventory in the channel. Winrevair sales rose 93% to $694m, which the company put down to higher demand, favourable US wholesaler and specialty pharmacy purchasing patterns and launch uptake in some international markets. Gardasil sales rose 14% to $2.0bn, which Merck linked to buying patterns by US public-sector customers and higher net prices, and Animal Health sales rose 4% to $1.68bn.

"Our science-led strategy is transforming our business," chairman and chief executive Robert Davis said in the release. Merck furnished the release to the SEC at 06:43 ET (11:43 CET). Its shares were at $148.43 at 10:43 ET (15:43 CET) on 29 October 2026, up 5.32% from the previous close, according to Nasdaq; trading was still open.