Merck Q3 2026 earnings: profit and sales beat estimates on Keytruda, newer drugs
Merck topped Wall Street's profit and sales estimates for Q3 2026, as growth in Keytruda and newer drugs offset continued softness in its Gardasil vaccine.
| Q3 2026 | Reported | Expected | Surprise |
|---|---|---|---|
| EPS | $2.49 | $2.10 | +18.5% |
| Revenue | $18.09B | $17.49B | +3.4% |
Key takeaways
- Merck’s adjusted (non-GAAP) earnings came in at $2.49 per share, well above the $2.10 analysts expected, and revenue of $18.1 billion topped the roughly $17.5 billion forecast. GAAP earnings per share were lower because they include one-time charges tied to recent licensing and acquisition deals, which don’t count toward the adjusted figure Wall Street tracks.
- Keytruda, Merck’s top-selling cancer immunotherapy, together with its newer under-the-skin version Keytruda Qlex, brought in $8.6 billion, up 6% from a year earlier and the main engine behind the quarter’s growth.
- Two smaller but fast-growing drugs stood out: Winrevair, a treatment for a rare type of high blood pressure in the lungs, nearly doubled in sales (up 93% to $694 million), and the newer pneumococcal vaccine Capvaxive rose 8% to $263 million, helped by strong uptake overseas even as U.S. sales softened.
- Management flagged on the earnings call that about $550 million of the quarter’s sales came from distributors stocking up earlier than usual rather than from underlying demand — roughly $200 million of that tied to Keytruda and $50 million to Winrevair — and said this boost should reverse in the fourth quarter.
- Gardasil, Merck’s HPV vaccine, continued to be a weak spot, mainly because of soft demand in China; executives said that pressure could persist in coming quarters.
- Merck raised the midpoint of its full-year 2026 worldwide sales outlook, a sign of confidence in its newer products even as it keeps absorbing one-time costs from recent biotech deals.
- Profitability measured over the trailing twelve months looks thin on paper — net profit margin under 5% and per-share earnings down sharply from a year ago — but that mostly reflects one-time acquisition and licensing charges rather than a weaker core business: revenue over that same period is still up nearly 5%, and the share of each sales dollar left after production costs (gross margin) remains above 77%.
How the stock took it
Merck & Co Inc closed at $140.93 on Oct 28, 2026, the last session before the report, and at $149.52 on Oct 30, 2026, the first session after it — +6.1% across the report.
| Earlier report | Close before | Close after | Change |
|---|---|---|---|
| Aug 4, 2026 | $127.77 | $128.33 | +0.4% |
| May 4, 2026 | $112.16 | $113.15 | +0.9% |
| Nov 5, 2025 | $83.86 | $85.78 | +2.3% |
Closes from the market's daily record. Each figure spans the report date — from the last session that closed before it to the first that closed after — because a company may report before the open or after the close.
Fundamentals
| Metric | Value | Period |
|---|---|---|
| Gross margin | 77.3% | Trailing 12 months |
| Operating margin | 9.6% | Trailing 12 months |
| Net profit margin | 4.8% | Trailing 12 months |
| Pretax margin | 8.9% | Trailing 12 months |
| EPS | $1.25 | Trailing 12 months |
| Revenue growth (YoY) | 4.6% | Trailing 12 months |
| EPS growth (YoY) | -80.7% | Trailing 12 months |
| Return on equity | 6.6% | Trailing 12 months |
Sources: company report · earnings call · FiercePharma