Core Insights - Allka Research has over two decades of experience in investment, focusing on uncovering undervalued assets in various sectors including ETFs, commodities, technology, and pharmaceuticals [2] Group 1: Company Overview - Allka Research is distinguished by its conservative investment approach, which consistently identifies lucrative opportunities for clients [2] - The company aims to simplify investment strategies, making them accessible to both seasoned investors and newcomers [2] - Allka Research is committed to delivering substantial returns and strategic insights, fostering a community of informed investors [2] Group 2: Mission and Community Engagement - The mission of Allka Research is to provide thought-provoking analyses and informed perspectives to the Seeking Alpha community [2] - The company seeks to demystify investing, inspiring confidence in readers and enabling them to navigate the financial markets intelligently [2]

Core Viewpoint - Merck's Q3 sales reached $17.28 billion, exceeding market expectations, with adjusted EPS of $2.58, significantly surpassing Wall Street forecasts and last year's $1.57 [2][3] Financial Performance - Q3 sales of $17.28 billion exceeded the expected $16.96 billion, driven by strong performance from the pneumonia vaccine Capvaxive, which generated $244 million in sales, also above analyst estimates [3][4] - Merck adjusted its 2025 sales guidance down by $300 million, now expecting full-year sales of $64.5 billion to $65 billion, up from a previous estimate of $64.3 billion to $65.3 billion [3] - The company slightly raised its full-year profit forecast to $8.98 per share, from a prior estimate of $8.87 to $8.97 [3] Product Highlights - Capvaxive emerged as a standout product, with Q3 sales of $244 million, outperforming Wall Street expectations [4] - Capvaxive has the potential to become a preferred product, as it can prevent 80% of pathogenic strains in adults, compared to Pfizer's Prevnar, which covers only 50% [4] Cost Management - The company is actively implementing cost control measures in preparation for the patent expiration of Keytruda, with R&D spending down over $1.6 billion year-over-year [6] - Merck announced plans to cut annual spending by $3 billion by the end of 2027, primarily through workforce reductions and real estate holdings [6] Regulatory and Market Challenges - Merck faces potential tariff threats, with competitors like Pfizer and AstraZeneca negotiating agreements for drug discounts in exchange for tariff exemptions [7] - The company has stockpiled sufficient Keytruda inventory to mitigate tariff impacts this year and plans to invest over $9 billion in domestic manufacturing over the next four years [7] - Merck also faces challenges from government recommendations regarding its ProQuad vaccine, which may affect its market position [7]

Market Overview - US stock index futures are all down, with Dow futures down 0.32%, S&P 500 futures down 0.35%, and Nasdaq futures down 0.55% [1] - European indices also show declines, with Germany's DAX down 0.18%, UK's FTSE 100 down 0.67%, France's CAC40 down 1.04%, and the Euro Stoxx 50 down 0.61% [2][3] - WTI crude oil prices fell by 0.86% to $59.96 per barrel, while Brent crude also dropped by 0.86% to $63.77 per barrel [4] Economic and Policy Updates - The meeting between Chinese President and US President Trump emphasized that economic and trade relations should be a stabilizing force rather than a point of conflict [5] - Federal Reserve Chairman Jerome Powell's comments on interest rate cuts have led to skepticism in the market, with the 10-year US Treasury yield holding steady at 4.08% after a previous spike [5] - Powell also stated that the current AI investment wave is fundamentally different from the internet bubble, highlighting that AI companies are rooted in profitability and real economic activity [6] Company Earnings and Performance - Roblox reported a record Q3 with 151.5 million daily active users, a 70% year-over-year increase, and bookings of $1.92 billion, exceeding analyst expectations [7] - Microsoft exceeded Q1 expectations with revenues of $77.7 billion, driven by a significant increase in capital expenditures related to AI [7] - Alphabet's Q3 revenue was $102.35 billion, up 16% year-over-year, with strong performance in its cloud division [8] - Meta's Q3 net profit fell 83% due to a one-time tax expense, despite a 26% increase in revenue to $51.24 billion [9] - Starbucks reported Q4 revenue of $9.57 billion, a 5.5% increase, with same-store sales returning to positive growth [10] - Shell's Q3 profit exceeded expectations, supported by strong oil and gas trading performance despite weak energy prices [11] - TotalEnergies' Q3 adjusted net profit fell 2.3% to $3.98 billion, meeting analyst expectations [12] - Stellantis reported a 13% increase in Q3 revenue to €37.2 billion, but issued a cost warning that affected stock performance [13] - Samsung Electronics' semiconductor division saw a 79% increase in Q3 operating profit, driven by AI demand [14] Future Outlook - OpenAI is reportedly preparing for an IPO that could value the company at $1 trillion, with plans to raise at least $60 billion [5] - Eli Lilly raised its full-year guidance due to strong sales from its weight loss and diabetes drugs, with Q3 sales reaching $17.6 billion [17] - Tesla plans to showcase its Cybercab model at the Shanghai International Import Expo in November [19]

Third-Quarter 2025 Sales and Earnings Merck & Co., Inc., Rahway, N.J., USA October 30, 2025 Strategy and Business Update Robert M. Davis Chairman and Chief Executive Officer Financial Results and Outlook Caroline Litchfield Executive Vice President and Chief Financial Officer Research Update Dr. Dean Y. Li Executive Vice President and President, Research Laboratories Question & Answer Session 2 Agenda Agenda Forward-looking statement of Merck & Co., Inc., Rahway, N.J., USA This presentation of Merck & Co., ...

Core Insights - Merck reported quarterly earnings of $2.58 per share, exceeding the Zacks Consensus Estimate of $2.36 per share, and showing a significant increase from $1.57 per share a year ago, resulting in an earnings surprise of +9.32% [1] - The company achieved revenues of $17.28 billion for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 1.24% and up from $16.66 billion year-over-year [2] - Merck has consistently surpassed consensus EPS estimates over the last four quarters, achieving this four times [2] Earnings Outlook - The sustainability of Merck's stock price movement will largely depend on management's commentary during the earnings call and future earnings expectations [3][4] - The current consensus EPS estimate for the upcoming quarter is $2.18 on revenues of $16.35 billion, and for the current fiscal year, it is $8.92 on revenues of $64.76 billion [7] Industry Context - The Large Cap Pharmaceuticals industry, to which Merck belongs, is currently ranked in the bottom 25% of over 250 Zacks industries, indicating potential challenges for stock performance [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact Merck's stock performance [5] Stock Performance - Merck shares have underperformed the market, losing about 13% since the beginning of the year, while the S&P 500 has gained 17.2% [3] - The estimate revisions trend for Merck was unfavorable prior to the earnings release, resulting in a Zacks Rank 4 (Sell) for the stock, indicating expectations of underperformance in the near future [6]

Group 1 - US stock index futures experienced slight declines, with Nasdaq futures down 0.35%, S&P 500 futures down 0.24%, and Dow futures down 0.33% [1] - Major European indices collectively fell, with Germany's DAX down 0.15%, UK's FTSE 100 down 0.61%, France's CAC down 0.91%, and the Euro Stoxx 50 down 0.52% [1] - OpenAI is reportedly planning to apply for an IPO as early as 2026, with a potential valuation of up to $1 trillion [1] - Alphabet, Google's parent company, reported record Q3 revenue of $102.3 billion, with a 34% year-over-year increase in cloud computing revenue [1] - Microsoft reported Q1 FY2026 revenue of $77.67 billion and earnings per share of $3.72, both exceeding expectations; however, Azure and other cloud revenue fell short of buyer expectations [1] - Meta's Q3 revenue was $51.2 billion, with net profit declining to $2.7 billion due to one-time tax expenses; the company raised its full-year capital expenditure guidance [1] Group 2 - Eli Lilly reported a 54% year-over-year revenue increase to $17.6 billion in Q3, raising its full-year revenue forecast [2] - Merck's Q3 sales reached $17.28 billion, with adjusted earnings per share of $2.58, both exceeding expectations [2] - Stellantis reported a 13% year-over-year revenue increase to €37.2 billion in Q3, noting that US tariffs have caused approximately €1 billion in losses this year [2] - Shell's Q3 adjusted profit was $5.43 billion, surpassing expectations; the company announced a $3.5 billion stock buyback plan [2] - ServiceNow reported Q3 revenue of $3.41 billion, with adjusted earnings per share of $4.82, both exceeding expectations; the company plans a 1-for-5 stock split [2] - eBay's Q3 sales grew 9% year-over-year to $2.82 billion, with adjusted earnings per share of $1.36, exceeding expectations [2] - Carvana, a US used car retailer, reported a 54.5% year-over-year revenue increase to $5.65 billion in Q3, with earnings per share of $1.03, which fell short of analyst expectations [2] - KLA Corporation, a semiconductor testing equipment manufacturer, reported a 13% year-over-year revenue increase to $3.21 billion in Q1 FY2026, with adjusted earnings per share of $8.81, exceeding expectations [2] - Novo Nordisk is reportedly increasing its bid for Metsera, while Pfizer's $4.9 billion acquisition may face uncertainties [2] Group 3 - S&P has downgraded Strategy's credit rating to junk status at B-, citing significant "currency mismatch" risks [3]

Core Viewpoint - Merck & Co. (MRK.US) has lowered its revenue guidance for 2025, indicating challenges ahead as it prepares for the patent expiration of its key cancer drug, Keytruda [1][2] Financial Performance - The company adjusted its 2025 revenue guidance down by $300 million, now expecting sales between $64.5 billion and $65 billion [1] - Third-quarter revenue reached $17.3 billion, a 4% year-over-year increase, surpassing market expectations of $16.96 billion [2] - Net profit for the quarter was $5.79 billion (or $2.32 per share), up from $3.16 billion ($1.24 per share) in the same period last year [2] - Adjusted earnings per share were $2.58, exceeding the market forecast of $2.35 [2] - The company slightly raised its full-year earnings per share forecast to a maximum of $8.98 [2] Product Performance - Keytruda and the anticipated rare lung disease drug Winrevair did not meet sales expectations in the latest quarter [1] - Sales of the new pneumonia vaccine, Capvaxive, reached $244 million, exceeding Wall Street expectations [2] - The vaccine is positioned to compete directly with Pfizer's Prevnar, with Capvaxive showing an 80% efficacy against adult pathogens compared to Prevnar's 50% [2] - Sales of Gardasil, the second-largest product, declined by 24% to $1.7 billion, primarily due to decreased demand in China [3] Cost Management and R&D - R&D spending decreased by over $1.6 billion compared to the previous year, attributed to reduced business development costs [3] - The company announced a cost-cutting plan aiming to save $3 billion annually by 2027 through workforce reductions and real estate downsizing [2][3] Regulatory and Market Challenges - Merck is facing pricing pressures and competition from generics as Keytruda's patent is set to expire in 2028, with potential government-led price negotiations as early as 2027 [1] - The company has not disclosed whether it has reached a pricing agreement with the government, but it has prepared sufficient Keytruda stock to mitigate potential tariff impacts [4] - Merck plans to invest over $9 billion in U.S. manufacturing over the next four years to enhance domestic drug production capabilities [4]

Core Insights - Merck reported an increase in third-quarter profit and raised its full-year outlook due to the growing demand for its Keytruda cancer drug [1] Financial Performance - The company experienced higher profits in the third quarter, indicating strong financial health and operational efficiency [1] - The full-year outlook has been boosted, reflecting confidence in continued revenue growth driven by Keytruda [1] Product Demand - Demand for Keytruda, Merck's flagship cancer drug, continues to rise, contributing significantly to the company's revenue growth [1]

Financial Performance - Total sales for Q3 2025 reached $17,276 million, a 4% increase compared to Q3 2024[2] - Net income attributable to Merck for Q3 2025 was $5,785 million, reflecting an 83% increase year-over-year[2] - The earnings per share for Q3 2025 was $2.32, an increase of 87% from $1.24 in Q3 2024[2] - The income before taxes for Q3 2025 was $6,745 million, a 65% increase compared to $4,090 million in Q3 2024[2] - The tax rate for Q3 2025 was 14.2%, compared to 22.7% in Q3 2024[2] - The company reported a significant increase in net income for the year-to-date period, totaling $15,301 million, a 14% increase from $13,389 million in the same period last year[2] Sales Performance - Year-to-date sales for 2025 reached $48,611 million, showing no change from the same period in 2024[2] - Total sales for Q3 2025 reached $17,276 million, a 4% increase from $16,657 million in Q3 2024[10] - Pharmaceutical sales were $15,611 million, up 4% from $14,943 million in the same quarter last year[10] - Total sales for September YTD 2025 reached $48,611 million, a slight increase from $48,544 million in 2024[19] - Pharmaceutical sales were $43,299 million in September YTD 2025, remaining relatively stable compared to $43,358 million in 2024[19] Product Sales - Keytruda sales increased by 10% to $8,142 million compared to $7,429 million in Q3 2024[10] - Alliance revenue from Lynparza rose by 12% to $379 million, while Lenvima's revenue increased by 3% to $258 million[10] - Total vaccines sales decreased to $3,370 million from $3,675 million, a decline of 8% year-over-year[14] - Diabetes sales grew to $703 million, up from $592 million, reflecting a 19% increase[16] - Animal health segment reported sales of $1,615 million, a 9% increase from $1,487 million in the previous year[10] - Livestock sales increased by 16% to $1,023 million, while companion animal sales slightly decreased by 2% to $592 million[10] - Keytruda sales increased by 8% to $23,303 million in September YTD 2025, up from $21,646 million in 2024[19] - Gardasil/Gardasil 9 sales decreased significantly by 40% to $4,202 million in September YTD 2025, down from $7,032 million in 2024[19] - Total vaccines sales were $8,347 million in September YTD 2025, down from $10,755 million in 2024, reflecting a decline of 22.4%[23] - Total diabetes sales increased by 11.2% to $2,283 million in September YTD 2025, compared to $2,053 million in 2024[25] - Alliance revenue for Koselugo was $301 million in September YTD 2025, significantly higher than $114 million in 2024[25] Market Performance - The U.S. market contributed $27,371 million to total sales in September YTD 2025, a 14% increase from $24,089 million in 2024[19] - International sales decreased by 13% to $21,240 million in September YTD 2025, down from $24,455 million in 2024[19] - U.S. pharmaceutical sales increased by 15% year-over-year to $9.493 billion in Q3 2025, up from $8.227 billion in Q3 2024[28] - Japan's pharmaceutical sales decreased by 25% year-over-year to $693 million in Q3 2025, down from $919 million in Q3 2024[28] - Sales in China dropped significantly by 62% year-over-year to $377 million in Q3 2025, compared to $996 million in Q3 2024[28] Expenses and Income - Research and development expenses decreased by 28% in Q3 2025, totaling $4,234 million compared to $5,862 million in Q3 2024[2] - The cost of sales for Q3 2025 was $3,855 million, a decrease of 6% from $4,080 million in Q3 2024[2] - Selling, general and administrative expenses for Q3 2025 were $2,633 million, down 4% from $2,731 million in Q3 2024[2] - Interest income for Q3 2025 was $(96) million, compared to $(127) million in Q3 2024[31] - Total net other income/expense for Q3 2025 was $(238) million, an increase in loss compared to $(162) million in Q3 2024[31] - The company reported a total interest expense of $327 million in Q3 2025, slightly down from $330 million in Q3 2024[31] - Exchange losses increased to $56 million in Q3 2025 from $33 million in Q3 2024[31] Future Outlook - The company anticipates continued growth in key therapeutic areas and plans to expand its market presence through new product launches and strategic partnerships[10] - The full-year pharmaceutical sales guidance for 2025 is projected at $57.400 billion, reflecting a slight increase from $57.000 billion in 2024[28]

Merck & Co. beats third-quarter sales expectations on strong results from its pneumonia vaccine https://t.co/dksY4yLnlt ...