Merck on Tuesday beat second-quarter estimates and hiked its revenue outlook, as a slate of new products showed strong growth. 

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But the pharmaceutical giant cut its profit guidance due to a charge tied to its acquisition of biotech company Terns Pharmaceuticals. 

Merck now anticipates its 2026 revenue will come in between $66.3 billion and $67.3 billion, up from a previous guidance of $65.8 billion and $67 billion. 

The company also expects adjusted earnings to be between $2.66 and $2.76 per share, which now includes a one-time charge of $5.7 billion, or $2.31 per share, related to the Terns deal. It also includes a $9 billion, or $3.62 per share, charge related to Merck’s acquisition of Cidara Therapeutics in January. 

That adjusted profit outlook is down from a previous range of $5.04 to $5.16 per share. 

Merck has been on a buying spree as it races to offset generic competition for a few drugs, including Type 2 diabetes medications Januvia and Janumet later this year, and blockbuster immunotherapy Keytruda in 2028. The company is also betting on a newer drugs to replenish potential losses in revenue, including the first PCSK9 pill designed to lower bad cholesterol, which was approved in July. 

Here’s what Merck reported for the second quarter compared with what Wall Street was expecting, based on a survey of analysts by LSEG: 

• 13 cents adjusted vs. 27 cents expected
• $16.61 billion vs. $16.36 billion expected

The company posted a net loss of $1.34 billion, or 54 cents per share, for the quarter. That compares with net income of $4.43 billion, or $1.76 per share, for the year-earlier period. 

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Excluding acquisition and restructuring costs, Merck posted a loss of 13 cents per share for the second quarter.

Merck raked in $16.61 billion in revenue for the quarter, up 5% from the same period a year earlier.

Keytruda generated $8.37 billion in sales for the second quarter, up 5% from the same period a year ago. Analysts were expecting revenue of $8.27 billion, according to StreetAccount estimates. 

The reported second-quarter total includes $463 million from the new, more convenient injectable version of Keytruda. That form is key to Merck’s efforts to offset likely declines in revenue after the original intravenous version of the drug goes off patent.

Merck’s other newer products also showed strong growth. 

Winrevair, which is used to treat a rare, deadly lung condition, generated $588 million in sales for the quarter, up 75% from the same period a year earlier. Analysts were expecting sales of $565 million. 

Merck’s pneumococcal vaccine, Capvaxive, also booked $184 million in sales for the quarter, up 42% from the year-earlier period. 

Meanwhile, Merck’s animal health business posted $1.78 billion in sales for the second quarter, which came above analysts’ estimates.

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