Net profit up in second quarter for German tech firm Merck KGaA
Although Merck reported higher net profit, it had lower earnings before interest, taxes, depreciation and amortization (EBITDA), a key earnings metric, and margin amid weak net sales over the same period.
Looking ahead, for fiscal 2025, Merck raised its guidance for EBITDA pre and now expects organic growth of 4% to 8%, compared to the previously expected 2% to 7%.
The change was driven by positive guidance adjustments for life science and health care as well as high cost discipline in all business sectors. The company also raised expectations for life science and health-care EBITDA pre.
Meanwhile, the company trimmed the higher end of its organic sales growth target range for the group to 2% to 5% from the previously expected 2% to 6%.
In the second quarter, net profit grew 8.3% to €655 million ($765 million) from the previous year's €605 million.
Earnings per share improved 7.1% to €1.50 from €1.40. Earnings per share pre amounted to €2.02, compared with €2.20 in the year-earlier quarter.
EBITDA dropped 8.5% from last year to €1.35 billion, and the EBITDA margin declined to 25.6% from 27.5%. EBITDA pre was €1.46 billion, down 3.1% from €1.51 billion in the previous year. The EBITDA margin was 27.8%, down from 28.2% over the same period.
Group net sales declined 1.8% to €5.26 billion from €5.35 billion, mainly due to negative foreign exchange effects of 4.2%. Net sales increased 2% organically despite ongoing geopolitical uncertainties.
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