Merck (MRK) earnings Q3 2025

Merck on Thursday reported third-quarter earnings and revenue that topped estimates as it saw strong demand for its cancer immunotherapy Keytruda.

The drugmaker also narrowed its full-year profit outlook to reflect lower estimated tariff costs, among other factors.

Sales of Keytruda topped $8 billion for the first time in a quarter, rising 10% from the same period a year ago. Revenue from the drug of $8.14 billion came in just slightly under the $8.24 billion analysts were expecting, according to StreetAccount estimates. 

The results come as Merck slashes $3 billion in costs by the end of 2027, and prepares to offset revenue losses from the upcoming patent expiration of Keytruda in 2028.

The pharmaceutical giant now expects its 2025 adjusted earnings to come in between $8.93 and $8.98 per share. That compares with its previous outlook of $8.87 to $8.97.

Merck said that reflects several new items, including “lower estimated costs related to the impact of tariffs.” During the previous two quarters, the company included a $200 million estimated hit from tariffs that President Donald Trump has implemented to date, but not his planned pharmaceutical-specific levies. Merck did not disclose a new estimate for the cost of existing tariffs. 

Merck said the guidance also reflects a benefit from an amended deal with AstraZeneca related to a pill for a specific genetic disorder, partially offset by costs tied to the company’s now-completed acquisition of Verona Pharma. 

Merck expects revenue for the year to come in between $64.5 billion and $65 billion, narrowed on both ends from its previous guidance of $64.3 billion to $65.3 billion. 

Here’s what Merck reported for the third quarter compared with what Wall Street was expecting, based on a survey of analysts by LSEG: 

• Earnings per share: $2.58 adjusted vs. $2.35 expected
• Revenue: $17.28 billion vs. $16.96 billion expected

The company posted net income of $5.79 billion, or $2.32 per share, for the quarter. That compares with net income of $3.16 billion, or $1.24 per share, for the year-earlier period. 

Excluding acquisition and restructuring costs, Merck earned $2.58 per share for the third quarter.

Merck raked in $17.28 billion in revenue for the quarter, up 4% from the same period a year ago.

Merck continued to see trouble with China sales of Gardasil, a vaccine that prevents cancer from HPV, the most common sexually transmitted infection in the U.S.

In February, Merck announced a decision to halt shipments of Gardasil into China beginning that month. In July, CFO Caroline Litchfield said the company will not resume shipments to China through at least the end of 2025, noting that inventories remain high and demand is still soft.

Gardasil generated sales of $1.75 billion for the quarter, down 24% from the same period a year ago due to lower demand in China. Still, that was in line with what analysts were expecting, according to StreetAccount.

During the earnings call, investors will likely look for additional updates on Gardasil’s presence in China and any details from Merck on potential drug pricing deals with Trump as part of his controversial “most favored nation” policy. Trump has so far inked agreements with Pfizer, AstraZeneca and EMD Serono, the largest fertility drug manufacturer in the world, that aim to make their medicines easier for Americans to access.

Merck’s pharmaceutical unit, which develops a wide range of drugs, booked $15.61 billion in revenue during the third quarter. That’s up 4% from the same period a year earlier.

Keytruda recorded $8.14 billion in revenue during the quarter, up 10% from the year-earlier period.

That increase was driven by higher uptake of the drug for earlier-stage cancers and strong demand for the treatment for metastatic cancers, which spread to other parts of the body, the company said.

Meanwhile, Merck’s newer drug Winrevair, which is used to treat a rare, deadly lung condition, recorded $360 million in sales for the quarter. Analysts had expected the drug to bring in $413 million, according to StreetAccount estimates. 

Winrevair’s growth largely reflects higher uptake in the U.S. But it was partially offset by the timing of distributor purchases of the drug and lower net pricing in the country, mainly due to changes to Medicare prescription drug plans. 

Merck’s animal health division, which develops vaccines and medicines for dogs, cats and cattle, posted nearly $1.62 billion in sales, up 16% from the same period a year prior. The company said that mainly reflects higher demand for livestock products.