Merck & Co. Inc. (NYSE: MRK) stock edged higher Thursday after the drugmaker reported third-quarter results that topped Wall Street revenue expectations and delivered upbeat financial guidance. The market liked what it saw, and honestly, who can blame it?

The company reported adjusted earnings of $2.49 per share, beating analysts' expected earnings of $2.08. That is not a small beat. That is the kind of beat that makes you wonder if the analysts were even trying.

Revenue increased 5% year over year to $18.085 billion, beating the consensus estimate of $17.313 billion, reflecting increased contributions from new products as well as strength in Oncology and Animal Health.

The Keytruda Franchise Just Keeps Expanding

Keytruda (including Qlex), the company's blockbuster cancer immunotherapy, generated $8.6 billion in global sales, up 6% year over year, driven by usage in tumors predominantly affecting women, including those with certain cervical and breast cancers, as well as increased use of Keytruda plus Padcev in urothelial cancer.

Merck also saw continued uptake in earlier-stage head and neck cancer.

Keytruda Qlex, the more convenient under-the-skin injection, reached $830 million in sales. That is a nice little franchise tucked inside the bigger franchise.

In prepared remarks, Merck said that the timing of U.S. customer purchases last year created a headwind to growth for Keytruda, but this was largely offset by an increase in channel inventory, which is expected to unwind in the fourth quarter. Translation: some of the numbers got shuffled around, but nothing to panic about.

Gardasil, Winrevair And Animal Health Deliver Strong Revenue

HPV vaccines Gardasil and Gardasil 9 sales jumped 14% to $1.995 billion, primarily due to higher sales in the U.S. reflecting favorable public-sector purchasing patterns (CDC purchase) and higher net pricing.

Animal Health revenue increased 4% to $1.676 billion, driven by growth across its Livestock and Companion Animal portfolios. Pets and livestock, it turns out, are also a growth business.

Winrevair, Merck's pulmonary arterial hypertension treatment, posted sales of $694 million, up 93% from a year earlier. That is the kind of growth that makes people sit up and pay attention.

Merck Boosts Fiscal 2026 Guidance

The U.S. drug giant raised its fiscal 2026 adjusted earnings guidance from $2.66-$2.76 per share to $2.77-$2.82 per share compared to the consensus of $2.65.

The EPS outlook includes one-time charges of $3.62 per share for the acquisition of Cidara, $2.31 per share for the acquisition of Terns, and $0.12 per share related to the global license agreement with SciBrunch.

It boosted its 2026 sales guidance from $66.30 billion-$67.30 billion to $66.80 billion-$67.30 billion versus Wall Street estimate of $67.052 billion.

Merck expects modest top-line growth in 2027. Modest. That is the word they chose. Not explosive, not transformative, just modest. Investors will have to decide whether modest is good enough.

MRK Price Action: Merck & Co. shares were up 5.06% at $148.05 at the time of publication on Thursday, according to market data.