NEW YORK (CNN/Money) -
Merck & Co. Thursday reported a 15 percent drop in profits for the first quarter as sales again got hurt by its withdrawal of Vioxx.
Merck said net income fell to $1.37 billion, or 62 cents a share, in the quarter, from $1.62 billion, or 73 cents a share, a year earlier. Sales at the Whitehouse Station, N.J.- based company fell to $5.4 billion from $5.6 billion, a decrease of about 5 percent.
The results matched Merck's recent forecast from April 13, when Merck announced that earnings per share would be 62 cents for the quarter, which was above the average Wall Street forecast of 56 cents a share at the time. The consensus forecast then rose to about 59 cents, according to Thomson Financial.
The company sees earnings of $2.44 to $2.52 a share for the full year, Graeme Bell, senior director of investor relations, said on Web cast, reiterating the company's earlier forecast. The consensus among analysts is $2.43 to $2.56 a according to Thomson Financial.
Merck (up $0.11 to $34.18, Research) shares edged higher in afternoon trading.
"We are committed to the dividend policy at the level that we currently see," said Bell, implying that dividends will not decrease.
Bell would not discuss Vioxx during the Web cast. But the company said that if Vioxx sales were removed from last year's first quarter sales figures, sales would have risen 8 percent in the first quarter instead of dropping.
In addition, Merck received unexpected revenue of more than $400 million in the first quarter through its partnership with AstraZeneca, Bell said. Merck expects to receive $1.4 to $1.6 billion in revenues from the sale of AstraZeneca products in the United States in 2005.
In answer to analysts' questions, Bell said the company had no plans to produce Zocor as a generic product after its patent expires in June 2006. Merck projects sales for Zocor, a cholesterol-lowering medicine, to hit $4.2 billion to $4.5 billion in 2005, down from $5.2 billion last year. Merck reported total sales of $22.9 billion in 2004.
Bell said Merck will be introducing a new product, Fosamax D, which is Fosamax with Vitamin D added, in a few days. The product has already been introduced in Mexico. The Fosamax patent is set to expire at August, 2007 in the U.S., and Fosamax D will also expire at that time.
Fosamax sales are projected at $3.3 billion to $3.6 billion worldwide this year, according to Merck, which would exceed last year's total of $3.2 billion.