Pfizer, Merck post higher sales, lower profits on megamergers

Big Pharma earnings reports are winding down now with numbers from two of the world's largest drugmakers, both of which pulled off megamergers with rivals last year. We're talking about Pfizer (NYSE: PFE) and Merck (NYSE: MRK), of course, and Q1 numbers show just how beneficial those mergers have been so far.

Pfizer's first-quarter profits grew more than analysts had estimated, thanks to products added to the company's arsenal with the Wyeth buyout. Sales came in at 54 percent higher, at $16.75 billion; Wyeth products accounted for $5.3 billion of that. And thanks to drugs that are already heavily discounted, the company doesn't expect an overwhelming impact from healthcare reform this year. The new law cut quarterly sales by $56 million.

"Many of Pfizer's largest products are already in very competitive areas and are likely to already carry greater discounts than those being implemented with the new law," Deutsche Bank analyst Barbara Ryan said in a note to clients (as quoted by Bloomberg).

Meanwhile, Merck saw its profits drop, but only because of costs related to its merger with Schering-Plough. Here are the numbers: Merck posted profits of $299 million or 9 cents per share, way down from last year's $1.43 billion, or 67 cents per share. Without those special charges, the company posted EPS of 83 cents, beating analyst estimates by 8 cents. And sales more than doubled to $11.42 billion from $5.39 billion.

Still, the company barely lived up to Wall Street expectations with its full-year profits forecast. The company said it's expecting 2010 earnings of $3.27 to $3.41 per share; analysts had forecast $3.41, Reuters notes.

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