Key Highlights
- Merck KGaA reported Q1 net profit of €669 million, down 9.4% year-over-year, yet surpassed EPS expectations of €1.99 by delivering €2.11.
- Revenue declined 2.8% to €5.13 billion but exceeded analyst projections of €5.09 billion.
- 2026 adjusted EBITDA forecast increased to €5.7–€6.1 billion from the previous €5.5–€6.0 billion range.
- The Electronics segment shined, fueled by robust demand for AI and advanced computing materials.
- Delayed generic entry for multiple sclerosis treatment Mavenclad—now expected in May rather than March—provides additional revenue cushion.
Merck KGaA delivered first-quarter results on Wednesday that exceeded analyst expectations despite declining profits, sending shares soaring 8% to their highest level in two months.
The German pharmaceutical and chemical company reported net profit of €669 million, representing a 9.4% year-over-year decline, which translated to €2.11 per share—comfortably above the €1.99 consensus estimate. Revenue totaled €5.13 billion, a 2.8% decrease from the prior-year period, but still managed to beat the €5.09 billion forecast. Currency fluctuations weighed on reported figures, though core business momentum proved stronger than anticipated.
Investor enthusiasm was particularly driven by the company’s decision to upgrade its full-year 2026 financial targets.
The revised adjusted EBITDA guidance now stands at €5.7 billion to €6.1 billion, representing an upward adjustment from the earlier €5.5 billion to €6.0 billion range. Management set revenue guidance at €20.4 billion to €21.4 billion for the year. The organic sales growth projection was also improved to 0%–3%, up from the previous -1% to 2% outlook.
Electronics Segment Shines
Merck’s Electronics business unit delivered exceptional performance during the quarter. Strong appetite for specialized materials used in cutting-edge semiconductor manufacturing—especially those supporting AI infrastructure and high-performance computing applications—powered impressive growth.
While this momentum isn’t entirely new for Merck, the ongoing AI boom continues to create favorable conditions for the division’s specialty materials business.
The company’s first-quarter adjusted EBITDA reached €1.53 billion, declining only 0.3% and substantially beating the €1.46 billion analyst consensus.
Life Science Division Benefits from Timing
The Life Science business unit also posted results that exceeded expectations. Currency-adjusted revenue climbed 8.3%, partially boosted by a customer establishing a new warehouse facility and other clients increasing laboratory supply inventories amid supply chain concerns related to the Iran conflict.
Merck had previously indicated that U.S. revenue from Mavenclad, its multiple sclerosis medication, would begin declining in March following generic competition. However, this timeline has been extended to May, providing the division with several additional weeks of full-margin sales.
To offset eventual Mavenclad revenue erosion, the company is banking on specialized cancer treatments obtained through its $3.9 billion acquisition of SpringWorks Therapeutics completed last year.
Morgan Stanley analyst Thibault Boutherin indicated he anticipates Merck will outperform following the first-quarter results, noting that full-year implications, including favorable currency movements, point to roughly 1% upside versus consensus EBITDA and EPS projections.
The strong quarterly performance also represents an early success for newly appointed CEO Kai Beckmann, who was elevated from leading the electronics business unit earlier this month.
Organic EPS guidance was upgraded to €7.50–€8.20 from €7.10–€8.00, while EBITDA organic growth expectations improved to -2% to 2% from the previous -4% to 1% range.
Get 3 Free Stock Ebooks
Discover top-performing stocks in AI, Crypto, and Technology with expert analysis.
- Top 10 AI Stocks - Leading AI companies
- Top 10 Crypto Stocks - Blockchain leaders
- Top 10 Tech Stocks - Tech giants
