Merck KGaA reported a modest rise in third-quarter profit on Thursday, surpassing market expectations. The Merck KGaA Q3 profit increase was supported by favorable legislative changes in South America and the sale of a U.S. regulatory voucher.
The German pharmaceutical and specialty materials group said adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) increased 3.1% to 1.67 billion euros ($1.95 billion). Analysts had forecast an average of 1.56 billion euros, according to company data, making the Merck KGaA Q3 profit beat a positive surprise.
Revenue rose 1% to 5.32 billion euros, also slightly above market estimates. The increase was driven by contributions from rare cancer therapies acquired through Merck’s takeover of SpringWorks Therapeutics and strong demand for its biotech manufacturing equipment. The company said adverse currency effects partially offset these gains.
Gains from South America reforms
Merck said part of the Merck KGaA Q3 profit improvement stemmed from legislative reforms in South America that improved pricing conditions for its healthcare operations. The company also completed the sale of a priority review voucher granted by the U.S. Food and Drug Administration, adding to the quarter’s profits.
Despite the stronger performance, Merck noted that currency headwinds continued to weigh on results. “While the underlying business momentum remains solid, foreign exchange effects have had a noticeable impact on reported earnings,” the company said.
Biotech demand supports revenue
The life science segment, which supplies laboratory and bioprocessing products, continued to benefit from sustained demand for biotech production gear. However, the electronics business, which serves semiconductor manufacturers, showed signs of gradual recovery after a period of weak demand.
Merck’s healthcare division, which includes oncology and fertility treatments, saw growth supported by new product additions from SpringWorks. However, the company cautioned that healthcare revenue may moderate in the short term as product launches stabilize.
Outlook for 2025 steady
For the full year, Merck maintained its guidance for adjusted EBITDA between 6 billion euros and 6.2 billion euros, compared with 6.1 billion euros in 2024. The midpoint of the range remains unchanged reinforcing confidence after the solid Merck KGaA Q3 profit performance. The company previously projected growth of 4% to 8%, excluding currency and portfolio effects.
Chief Financial Officer Helene von Roeder said last month that Merck expects gradual improvement in its life science and electronics businesses next year, while the healthcare unit could experience a temporary slowdown. “We anticipate a gradual recovery in demand across most segments in 2025,” von Roeder said.
In October, Merck entered an agreement with the U.S. government to reduce the cost of certain fertility treatments in exchange for relief from potential trade tariffs. The company said the measure supports its long-term access and affordability goals.
Merck KGaA, based in Darmstadt, Germany, remains controlled by the founding Merck family, which holds a majority stake. The company operates in more than 60 countries, focusing on healthcare, life sciences, and electronics.
Merck shares were up slightly in early Frankfurt trading following the earnings release. Investors welcomed the company’s steady guidance and improving business momentum, and better-than-expected Merck KGaA Q3 profit results.
