By Adria Calatayud
Germany’s Merck KGaA is scheduled to report results for the third quarter on Thursday. Here is what you need to know:
SALES FORECAST: The pharmaceutical and chemicals group is expected to report net sales of 5.19 billion euros ($5.55 billion) for the third quarter, according to consensus estimates compiled by the company. For last year’s third quarter, Merck reported net sales of EUR5.81 billion.
EARNINGS FORECAST: Merck’s earnings before interest, taxes, depreciation, amortization and one-off items is forecast to come in at EUR1.39 billion, according to the company-provided consensus. The company reported an Ebitda excluding one-off items of EUR1.81 billion for the same period last year.
WHAT TO WATCH:
–OUTLOOK: As recently as last month, Merck reiterated its guidance for 2023, with net sales expected to range from a 2% decline to a 2% rise on an organic basis and Ebitda excluding one-off items to fall by between 3% and 9%. While guidance is likely to be left unchanged, the company could point toward results at the lower end of its ranges, JPMorgan analysts said in a research note.
–DIVISIONAL TRENDS: Merck could face questions about the outlook for its process-solutions business in light of mixed trends reported recently by peers, with Lonza Group cutting guidance for 2024 and Sartorius flagging signs of a modest recovery, UBS analyst Colin White said in a note. Meanwhile, investors will also be on the lookout for any signs on when the semiconductor cycle will bottom out given that Merck’s electronics customers have lowered expectations for next year, the UBS analyst said. Merck earlier this week confirmed it is contemplating job cuts within its electronics division as part of a cost-saving plan prompted by a market downturn that is lasting longer than expected.
Write to Adria Calatayud at [email protected]
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