Pharmaceutical company Merck (NYSE: MRK), whose colleagues include Pfizer (NYSE: PFE) and Johnson & Johnson (NYSE: JNJ), issued its Q2 numbers earlier in the week. Quite frankly, I found them to be boring. Of course, maybe boring isn't too bad these days, right? It's a lot better than an exciting ride on a profit-decline express.
Well, actually, Merck did see a decline in its bottom-line profit, but it wasn't an outrageously awful drop or anything like that. Merck made an adjusted 83 cents per share compared to an adjusted 86 cents per share in the comparable period. Three less pennies isn't the worst thing in the world on a relative basis. Plus, revenues increased 3% if you exclude currency effects (including them gives a decrease of 3%).
The big news, of course, is still the merger between Merck will be merging and Schering-Plough (NYSE: SGP). The hope here is that the pipeline will be the better for it. As The New York Times points out, there may be opportunities for synergies after the deal is completed so that management can execute a whole range of cost-saving initiatives.
That would be good for shareholders. I don't necessarily see anything in the report that makes me want to step up and buy the stock, but I do feel positive about the guidance. Merck believes it will earn on an adjusted basis somewhere between $3.15 per share and $3.30 per share for the full fiscal year. I think that makes the company cheap.
However, not only do I not see anything in the report that excites me, but I wouldn't want to step in ahead of the merger. I'd rather wait and see how things are after the deal is done. Bringing Schering-Plough into the fold is probably a wise move. I see the logic behind it. It will be interesting to check in on management's progress with the theoretical synergies once everything is settled.
Disclosure: I don't own any company mentioned; positions can change without notice.