Merck Beats Third Quarter Estimates as Keytruda and Gardasil Outperform and Raises Outlook

Merck posted higher than expected third quarter earnings on Thursday, driven by strong demand for its cancer drug Keytruda and its HPV vaccine Gardasil, and raised the low end of its full year revenue forecast. Shares rose nearly 3 percent in premarket trading after the report.

Merck reported third quarter revenue of 18.1 billion dollars, topping the average analyst estimate of 17.3 billion dollars, according to LSEG data reported by Reuters. Adjusted earnings were 2.49 dollars per share, ahead of expectations for 2.08 dollars per share. Seeking Alpha independently reported the same beat, with non-GAAP earnings of 2.49 dollars per share and a raised full year 2026 outlook.

Keytruda leads, with help from its new version

Sales of Keytruda rose 6 percent from the year ago quarter to 8.6 billion dollars, beating analyst estimates of 8.0 billion dollars, Reuters reported. The total included 830 million dollars from the new subcutaneously administered version, Keytruda QLEX.

That detail mattered in the report. The established drug grew again in the quarter, beat the number analysts had set for it, and a meaningful share of its sales already came from the newer version given by injection under the skin rather than the original form.

Gardasil beats on early CDC purchases

Gardasil sales rose 14 percent to just under 2 billion dollars, compared with Wall Street estimates of 1.8 billion dollars. Reuters reported that the result was helped by early purchases by the US Centers for Disease Control and Prevention.

Merck also said that about 550 million dollars of the company growth in the quarter was due to purchases of drugs being made earlier than expected. That timing detail helps explain part of the beat, and it sits alongside the Gardasil purchases in the same category: demand that arrived in this quarter rather than a later one.

Outlook raised at the low end

Merck raised the low end of its full year revenue forecast to 66.8 billion dollars, from 66.3 billion dollars previously, while maintaining the prior high end projection of 67.3 billion dollars. Seeking Alpha, in its summary of the report, linked the raised outlook to strong Keytruda and Winrevair sales as well as the earnings beat.

The shape of the raise was narrow and specific. Merck did not lift the whole range. It moved the floor up by 500 million dollars and left the ceiling where it was, a change that reflects a quarter that came in ahead of estimates without a new statement about how far above the old range the year could finish.

What the quarter showed

On the numbers reported Thursday, Merck beat on revenue by about 800 million dollars against the LSEG estimate and beat on adjusted earnings by 0.41 dollars per share. Its two best known products both beat their own estimates, Keytruda by 600 million dollars and Gardasil by close to 200 million dollars against the figures Reuters carried. Shares responded in premarket trading, rising nearly 3 percent, as investors took in a raised revenue floor for the full year and a quarter driven by the cancer drug and the vaccine.