Merck KGaA 2nd-qtr earnings beat expectations

German pharmaceuticals and chemicals major Merck KGaA (MRK: DE) said this morning that it has generated organic sales growth of 3.4% in the second quarter of 2014. In addition, the company reported an acquisition-related sales increase of 3.0%, which was countered by negative foreign exchange effects of -4.5%.

Overall, sales increased a moderate 1.9% to 2.8 billion euros ($3.75 billion). Despite considerably lower royalty, license and commission income, earnings before interest, taxes, depreciation and amortization (EBITDA) pre one-time items grew to 846 million euros, equivalent to an EBITDA margin pre one-time items of 30.3% (second-quarter 2013: 30.1%), beating the 837 million-euro average estimate of 11 analysts surveyed by Bloomberg. Merck’s share edged up 1% to 62.99 euros in early Frankfurt trading

Royalty, license and commission income fell sharply by 30.4% to 68 million euros, mainly due to the decline in royalty and license income in the Merck Serono division. Total revenues, ie, sales plus royalty, license and commission income, nevertheless increased by 0.8% to 2.9 billion euros, reflecting the strength of the operating business.

Full-year forecast