Merck & Co. (Merck (MRK)) reported first-quarter 2026 earnings on Thursday, and at first glance, it looks like a mess: the company swung to an adjusted loss of $1.28 per share. But that headline number is misleading — it's almost entirely because Merck took a big charge for its acquisition of Cidara Therapeutics, to the tune of $3.62 per share. Strip that out, and the underlying business is actually doing pretty well.
The loss was better than what analysts expected — they were looking for a loss of $1.51 per share. A year ago, Merck earned $2.22 per share. Sales rose 5% to $16.29 billion, beating the consensus estimate of $15.82 billion. So the core story here is: Merck's operations are growing, even if the accounting looks ugly.
Oncology and Animal Health Lead the Way
The pharmaceutical segment brought in $14.35 billion in sales, up 5% year over year. The growth was led by oncology, as well as cardiometabolic and respiratory drugs, but vaccines, diabetes, and infectious diseases dragged things down a bit.
Keytruda, Merck's blockbuster immunotherapy for cancer, generated $8.03 billion in global sales — a 12% increase from last year. That's still the engine that drives the whole train.
The Animal Health segment also had a strong quarter, with revenue of $1.79 billion, up 13% year over year, thanks to good performance in both livestock and companion animal products.
Gardasil Slips, Winrevair Shines
Not everything is rosy. Gardasil and Gardasil 9, the HPV vaccines, brought in $1.07 billion in sales, down 19% from last year. The decline was mainly due to lower demand in China, plus lower sales in Japan after its national catch-up immunization program ended. In the U.S., unfavorable public-sector purchasing patterns also hurt, though higher net pricing partially offset that.
On the bright side, newer products are picking up steam. Winrevair, a therapy for pulmonary arterial hypertension (a rare heart-lung condition), saw sales jump 88% to $525 million. That reflects continued uptake in the U.S. and early launch momentum in international markets, especially Japan and Europe.
Merck Raises 2026 Guidance
Despite the quarterly loss, Merck is feeling optimistic about the full year. The company raised its fiscal 2026 adjusted earnings guidance from $5.00-$5.15 per share to $5.04-$5.16, compared to the consensus of $5.11. It also bumped up its sales guidance from $65.5 billion-$67 billion to $65.8 billion-$67 billion, versus the consensus of $66.61 billion.
That's a vote of confidence that the underlying business trends will continue.
What the Charts Say
Merck's stock is trading within its 52-week range, with a high of $125.14 and a low of $73.31. Right now, it's at $110.76, down 0.17% on the day. That puts it closer to the middle of its range.
Technically, the stock is showing some short-term weakness. It's trading 5.7% below its 20-day simple moving average and 6.4% below its 50-day SMA. The relative strength index (RSI) is at 37.08, which is neutral — not oversold, not overbought. But the moving average convergence divergence (MACD) is below the signal line, which leans bearish and suggests potential selling pressure.
Key resistance is at $124.00, while key support sits at $106.00. So there's a bit of a cushion before things get really uncomfortable.
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