Merck KGaA Cuts 2023 Outlook on Inventory, Semiconductor Woes

By Cecilia Butini

Merck KGaA on Thursday cut its outlook for the full year due to high inventory levels of customers in its Life Science business and delayed recovery in the semiconductor materials market, although it confirmed its mid-term objectives.

The Germany-based health-care and technology company also posted declining earnings and sales for the second quarter, though these came in slightly above expectations.

Merck said it now expects 2023 sales to be between 20.5 billion euros ($22.42 billion) and EUR21.9 billion, down from its previous guidance of EUR21.2 billion to EUR22.7 billion. Ebitda pre, an important earnings metric for the company, is expected to decline up to 9% and be in a range of EUR5.8 billion to EUR6.4 billion, having previously been seen between EUR6.1 billion and EUR6.7 billion.

In the second quarter, profit after tax declined to EUR706 million from EUR870 million on sales which fell to EUR5.30 billion from EUR5.57 billion, the company said. Ebitda pre declined to EUR1.55 billion from EUR1.78 billion. Analysts polled by FactSet had expected slightly lower figures.

The company cited foreign-exchange headwinds as contributing to the decline in sales in the quarter, and also as one further reason for the guidance cut.

Write to Cecilia Butini at [e-mail]

(END) Dow Jones Newswires

August 03, 2023 01:40 ET (05:40 GMT)

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