01:17 PM EDT, 07/30/2024 (MT Newswires) -- Merck ( MRK ) lowered its 2024 earnings guidance to reflect the costs tied to its Eyebiotech acquisition despite slightly raising its revenue outlook midpoint, while posting stronger-than-expected second-quarter results.

The drugmaker now expects full-year adjusted earnings per share in the $7.94 to $8.04 range, down from between $8.53 and $8.65 previously predicted. Analysts surveyed by Capital IQ are modeling for normalized EPS of $8.14 for the ongoing year.

The reduced non-GAAP earnings forecast reflects a one-time $1.3 billion charge, reflecting a $0.51 per share impact, for the Eyebiotech acquisition. The revised guidance also includes estimated expenses of $0.09 per share to be incurred to finance the Eyebiotech and Elanco Animal Health's (ELAN) aqua business acquisitions. Both deals closed earlier this month.

Shares of Merck ( MRK ) declined 10% in Tuesday trade.

Eyebiotech "expands our effort in ophthalmology and brings to Merck ( MRK ) a novel late-phase candidate for the treatment of retinal diseases," Chief Executive Robert Davis told analysts on Merck's ( MRK ) second-quarter earnings conference call, according to a Capital IQ transcript. "This promising new mechanism adds another substantial potential commercial opportunity to our expanding pipeline in an area of significant unmet medical need."

The company now expects sales to range between $63.4 billion and $64.4 billion, compared with a prior guidance of $63.1 billion to $64.3 billion. The Capital IQ-polled consensus was for revenue of $64.28 billion.

For the second quarter, revenue increased to $16.11 billion from $15.04 billion a year ago and surpassed the $15.84 billion market view. Adjusted earnings per share swung to $2.28 for the three months ended June 30 from a loss of $2.06 last year and topped the Street's $2.14 EPS view.

"Our business is demonstrating strong momentum as we exit the first half of the year," Davis said in a statement. Winrevair raked in $70 million in June-quarter US sales after receiving approval in March, surpassing the consensus of $56 million, according to Truist Securities.

Sales of Merck's ( MRK ) biggest product by revenue, Keytruda, jumped 16% to $7.27 billion, slightly above consensus, amid increased global uptake in "earlier stage cancers and continued strong demand from metastatic indications," according to Truist Vice President Srikripa Devarakonda. The revised full-year revenue guidance reflects continued Keytruda growth, she said.

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