Merck KGaA Reports Higher Profit Despite Drop in EPS

Merck KGaA announces increased profits and stable dividends for 2024. However, the company's EBIT is projected to grow alongside a slight decline in earnings per share, signaling mixed results for investors.

Date: 06-03-2025

AI Rating: 6

Earnings Per Share (EPS)
Merck KGaA reported earnings per share of 6.39 euros, which is down 1.5% from 6.49 euros last year. However, on an adjusted basis, EPS grew slightly to 8.63 euros from 8.49 euros, indicating some resilience in earnings performance despite the decline.

Net Income
For fiscal 2024, Merck's profit after tax decreased by 1.7% to 2.79 billion euros, down from 2.83 billion euros the previous year. This drop could signal concerns for investors regarding the company's overall net income and profitability trends moving forward.

Revenue Growth
The company reported net sales of 21.156 billion euros, an increase of 0.8% from last year. This indicates that while sales are growing, the rate is relatively modest, closely aligned with the projections for future sales.

Profit Margins
The EBITDA pre margin improved to 28.7% from 28.0% in the prior year, which is a positive sign indicating that the company is becoming more efficient in generating profit from its revenue. The EBITDA itself grew by 3.3% to 6.07 billion euros, suggesting a strong underlying performance in operations.

Guidance
For fiscal 2025, Merck anticipates net sales of between 21.5 billion and 22.9 billion euros, which suggests organic growth expectations of 3% to 6%. Furthermore, EBITDA pre is expected to grow organically by 3% to 8%, indicating confidence in future performance. However, the mixed results in EPS and net income are potential red flags for investors, warranting caution.

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