Merck & Co. (MRK) reported strong third-quarter 2026 earnings, driven by robust oncology demand and contributions from newer medicines. The company's non-GAAP earnings of $2.49 per share beat Zacks estimates by 17.5%, although they declined 3.5% year over year. Revenues increased 4.7% to $18.09 billion, exceeding expectations by about 5%. The company's key products, KEYTRUDA and KEYTRUDA QLEX, generated combined sales of $8.60 billion, up 6%, while WINREVAIR sales surged 93% to $694 million.
Merck raised its full-year 2026 revenue guidance to $66.8 billion to $67.3 billion and increased non-GAAP earnings guidance to $2.77-$2.82 per share. Chief financial officer Caroline Litchfield noted that third-quarter revenues benefited from approximately $550 million in favorable customer purchase timing, with some of these benefits expected to reverse in the fourth quarter and 2027. The company highlighted progress in developing a diversified portfolio to support growth beyond KEYTRUDA's loss of exclusivity.
During the earnings call, Merck emphasized significant clinical advancements, including positive Phase III results for sacituzumab tirumotecan in endometrial cancer and encouraging results from its collaboration with Moderna on intismeran autogene, an individualized mRNA cancer vaccine. The company also reported encouraging results for newer products like WINREVAIR, OHTUVAYRE, and LIPFENDRA, reinforcing its strategy to diversify beyond oncology.
However, executives cautioned that generic competition, vaccine market pressures, and rising research expenditures could temper growth in 2027. Merck anticipates modest revenue growth next year, with new product launches and Animal Health contributions partly offset by more than $2 billion in headwinds from generic competition and patent expirations. Despite these challenges, management expressed confidence in the company's long-term growth strategy and its ability to offset the eventual KEYTRUDA patent-expiration headwind.