Business

Comcast’s first quarter earnings beat Wall Street’s expectations.
Still, the company saw a year-over-year drop in its residential broadband subscribers as it continues to face heightened competition.
Peacock losses grew, as the company warned last quarter, although the streaming service’s subscriber base was up 60% year-over-year to 22 million.

The Comcast NBC logo is shown on a building in Los Angeles, California, June 13, 2018.
Mike Blake | Reuters

Comcast topped analyst expectations with its first-quarter earnings report Thursday, despite the cable and media giant’s residential broadband business’s slowing growth and mounting Peacock losses.
Shares of the company rose more than 4% in premarket trading. The stock is up more than 4% so far this year through Wednesday’s close.

Here’s how Comcast performed, compared with estimates from analysts surveyed by Refinitiv:

Earnings per share: 92 cents adjusted vs. 82 cents expected

Revenue: $29.69 billion vs. $29.3 billion expected

For the quarter ended March 31, Comcast reported earnings of $3.83 billion, or 91 cents per share, compared with $3.55 billion, or 78 cents per share, a year earlier. Adjusting for one-time items, Comcast posted earnings per share of 92 cents for the most recent period.
Revenue dropped 4% to $29.69 billion from $31.01 billion in the prior-year period, with the company noting that last year it had broadcast both the Super Bowl and Beijing Olympics during the first quarter. 
The Philadelphia company said its first-quarter adjusted earnings before interest, taxes, depreciation and amortization grew 3% to $9.42 billion during the first quarter. 
Comcast said it returned $3.2 billion to shareholders in the quarter through a mix of $1.2 billion in dividend payments and $2 billion in share repurchases. 

Comcast had 21,000 fewer residential broadband customers year-over-year at the end of the three-month period, adding just 3,000 during the quarter. It received a slight boost from its business customers. Company executives had warned earlier this year that Comcast was likely to lose broadband subscribers in the first quarter. 
Still, it was a sign that Comcast, like its peers, continues to face slowing growth in the broadband business. Executives have said that, while the loss rate of customers is very low, growth has stagnated – especially since the early days of the Covid pandemic – as they face heightened competition from telecom and wireless providers. 
Comcast executives said on Thursday’s earnings call that the company expects adding subscribers to likely be a challenge in the near term, but will focus on average revenue per user to grow revenue for the segment.
The Xfinity mobile business grew to nearly 5.67 million customers during the quarter, a sign that its wireless service – which is provided in conjunction with an agreement to use Verizon’s network – remains a bright spot. 
Cable TV customers continued their exodus from the traditional bundle, with Comcast losing 614,000 subscribers during the quarter. 
Last month, Comcast announced it was changing how it reported its segments, now grouping its Xfinity-branded broadband, cable TV and wireless services with its U.K.-based Sky, which includes pay TV services and Sky-branded entertainment TV channels to form the “connectivity and platforms” segment. Total revenue for the segment was about $20.15 billion, a slight drop from the last quarter due to the impact of foreign currency. 
The second segment, content and experiences, includes all of NBCUniversal’s TV and streaming business, the international networks and Sky Sports channels, as well as its film studios and theme parks units. Overall revenue for the segment was down nearly 10% to $10.26 billion in the quarter.
The media business’ revenue took a dip in the first quarter, with it dropping about 20% to $6.15 billion, due to its comparison last year, when NBC aired the Super Bowl and had the rights to the Beijing Olympics for its TV networks and Peacock. Still, Comcast said excluding the $1.5 billion incremental revenue from these two major sporting events, media revenue was still down about 2%. 
The tightening ad market showed on Comcast’s balance sheet this quarter, as it has for peers like Paramount Global and Warner Bros. Discovery. Excluding the Olympics and Super Bowl – two events that generate a lot of ad revenue – domestic advertising during the quarter was down about 6% driven by lower TV network revenue and a TV ratings decline. 
Domestic TV distribution revenue was up, excluding the Olympics, which Comcast noted was primarily due to higher revenue at Peacock, which had more paid subscribers. 
Comcast said Peacock subscribers grew more than 60% year-over-year to 22 million, and revenue was up 45% to $685 million. Peacock had $704 million in losses, compared with losses of $456 million in the same period last year. 
Last quarter, the company noted Peacock losses would amount to about $3 billion this year. The streaming service’s costs continued to weigh on the media segment’s earnings. Executives said Thursday they were “encouraged” by Peacock’s results, and following the expected peak losses this year will see a steady improvement. Cavanagh said the company had the confidence Peacock would “break even and grow from there.”
NBCUniversal’s film segment got a boost from the animated “Shrek” spinoff “Puss in Boots: The Last Wish” and horror flick “M3GAN,” during the quarter, with revenue up nearly 2% to $2.96 billion. 
Both Roberts and Cavanagh touted NBCUniversal’s animation film business on Thursday’s call, with the success of “The Super Mario Bros. Movie,” which was released earlier this month. This week it surpassed $900 million at the global box office, including $444 million domestically.
“We’ve had tremendous success creating franchises,” Roberts said on Thursday’s call, noting the “Despicable Me” and “Shrek” franchises. “These are the results of the strategic decisions we made years ago to become a leader in animation and the conviction to invest in the business in the pandemic.”
Cavanagh noted that NBCUniversal’s “Jurassic Park,” “Minions” and “Halloween” installments last year helped boost its box office.
“We’re really proud of our animation business,” Cavanagh said Thursday.
NBCUniversal’s upcoming film slate includes next month’s “Fast X,” the next installment in the popular “Fast and Furious” franchise, as well as Christopher Nolan’s next epic, “Oppenheimer,” about the scientist who led the development of the atomic bomb during World War II. It will be released in July.
The company’s theme park segment kept on rolling higher, especially since the shutdowns of parks during the height of the pandemic, with revenue up 25% to $1.95 billion. Revenue was boosted by international parks, which were still weighed down by pandemic restrictions last year. The opening of Super Nintendo World helped boost revenue too. 
Earlier this week, NBCUniversal faced a shakeup with the ouster of CEO Jeff Shell due to a sexual harassment and discrimination complaint filed by an employee. CEO Brian Roberts addressed the matter at the start of Thursday’s call, saying it was “obviously a tough moment” for the company but noting his confidence in NBCUniversal’s leadership team, which will now report to President Mike Cavanagh.
Disclosure: Comcast owns NBCUniversal, the parent company of CNBC.
Correction: Comcast’s total media revenue was down more than 20%. An earlier version misstated that figure. More

The defining deal of the mining industry’s last merger wave never happened. bhp Billiton’s audacious $150bn bid in 2008 for a rival, Rio Tinto, which would have created a commodities super-group, captured the debt-fuelled spirit of the commodities “supercycle” of the 2000s. As China’s growth slowed and the miners’ capital spending peaked, things fell back to earth. The industry has atoned for its sins by cleaning up its balance-sheets and returning record sums to shareholders. Years of discipline, a surge in commodity prices and the prospect of an explosion in demand for “green” metals have mining bosses again dreaming up fantasy deals. For growth-hungry firms, the high costs and risks of developing new projects and relatively cheap valuations for companies in the sector mean that buying looks more attractive than digging. Last year, as dealmaking slumped in other sectors, mining bosses shook hands at a rate not seen in a decade.Listen to this story. Enjoy more audio and podcasts on More

ANNALENA BAERBOCK kicked off her first trip to China as Germany’s foreign minister in April with a visit to a production site of Flender. The Mittelstand firm makes parts for wind turbines in Tianjin, a coastal city around 130km south-east of Beijing. Ms Baerbock toured the facility for about an hour, all the while bombarding her hosts with questions, such as whether its suppliers are local. It is unusual for a foreign minister to tour a factory, but it shows the importance of business ties between Germany and China. The country is Germany’s biggest trade partner and an important destination for foreign investments in several industries that are the backbone of the Mittelstand. Yet as the value of trade increased for the seventh consecutive year in 2022, the bilateral deficit widened. German imports from China rose by a third compared with 2021 to €192bn ($202bn), whereas exports of German wares to China increased by only 3% to around €107bn.Ms Baerbock’s ministry is spearheading efforts to write a new China strategy. Its much-awaited publication has been repeatedly postponed because of the need to strike a balance between boosting German business while at the same time encouraging some firms to diversify and make Germany less dependent on imports of critical raw materials from China. As Germany’s government recalibrates its China strategy two trends are emerging. One is that the companies already heavily invested in China are doubling down. Some of the country’s largest companies greatly rely on Chinese customers and suppliers. That includes its three big carmakers (Volkswagen, Mercedes-Benz and BMW); BASF, a chemicals giant; and Bosch, a car-components supplier. BASF is charging ahead with its €10bn investment in a new production site in southern China. In October vw announced a €2.4bn investment in a joint venture with a Chinese firm for self-driving cars and will spend €1bn on a new centre for developing electric cars. The other is that German companies are increasingly producing in China for China. Flender’s factory in Tianjin serves only the Chinese market. This reinforces an uncomfortable position for policymakers. Overall Germany may be less dependent on China than generally assumed. A recent study published by the Bertelsmann foundation, the German Economic Institute in Cologne (iw), merics, a think-tank, and the bdi, an association of German industry, scrutinised investment in China. It showed that between 2017 and 2021 China accounted for, on average, 7% of German foreign-direct investment and 12-16% of annual corporate profits, much the same as America, but far less than the eu, which provided, on average, 56% of corporate profits in the same period. And only around 3% of German jobs either directly or indirectly depend on exports to China, says Jürgen Matthes of iw. Yet that is not a reason to be less concerned about China, warns Max Zenglein of merics. In the past the assumption was that business in Germany would automatically benefit from investment in China, he says. With German companies increasingly spending on local production and research and development, the bulk of local profits is now often being reinvested there. And in the longer term the “local to local” trend could hurt both German jobs and exports to China. Another cause for concern is the cluster of huge German firms and industries that continue to rely heavily on China. The survival of its large carmakers and chemicals firms could hinge on access to the country. And China supplies 95% of the solar cells installed in Germany as well as 80% of laptops, and 58% of the circuit boards that are integral to other electronic goods. Germany also depends on China for the rare-earth metals needed to make semiconductors and lithium-ion batteries as well as antibiotics and other important medicines. Mr Matthes warns that companies will continue to pour billions into China unless the new policy provides incentives to do otherwise. If China’s threats to Taiwan turn nastier the consequences could be devastating for firms doing an ever-bigger slice of their business there. The latest tentative date for the publication of the new strategy is just after a meeting on June 20th between Olaf Scholz, the German chancellor, and Li Qiang, China’s prime minister. It is high time for a rethink. ■To stay on top of the biggest stories in business and technology, sign up to the Bottom Line, our weekly subscriber-only newsletter. More

ANNALENA BAERBOCK kicked off her first trip to China as Germany’s foreign minister in April with a visit to a production site of Flender. The Mittelstand firm makes parts for wind turbines in Tianjin, a coastal city around 130km south-east of Beijing. Ms Baerbock toured the facility for about an hour, all the while bombarding her hosts with questions, such as whether its suppliers are local. It is unusual for a foreign minister to tour a factory, but it shows the importance of business ties between Germany and China. The country is Germany’s biggest trade partner and an important destination for foreign investments in several industries that are the backbone of the Mittelstand. Yet as the value of trade increased for the seventh consecutive year in 2022, the bilateral deficit widened. German imports from China rose by a third compared with 2021 to €192bn ($202bn), whereas exports of German wares to China increased by only 3% to around €107bn.Ms Baerbock’s ministry is spearheading efforts to write a new China strategy. Its much-awaited publication has been repeatedly postponed because of the need to strike a balance between boosting German business while at the same time encouraging some firms to diversify and make Germany less dependent on imports of critical raw materials from China. As Germany’s government recalibrates its China strategy two trends are emerging. One is that the companies already heavily invested in China are doubling down. Some of the country’s largest companies greatly rely on Chinese customers and suppliers. That includes its three big carmakers (Volkswagen, Mercedes-Benz and BMW); BASF, a chemicals giant; and Bosch, a car-components supplier. BASF is charging ahead with its €10bn investment in a new production site in southern China. In October vw announced a €2.4bn investment in a joint venture with a Chinese firm for self-driving cars and will spend €1bn on a new centre for developing electric cars. The other is that German companies are increasingly producing in China for China. Flender’s factory in Tianjin serves only the Chinese market. This reinforces an uncomfortable position for policymakers. Overall Germany may be less dependent on China than generally assumed. A recent study published by the Bertelsmann foundation, the German Economic Institute in Cologne (iw), merics, a think-tank, and the bdi, an association of German industry, scrutinised investment in China. It showed that between 2017 and 2021 China accounted for, on average, 7% of German foreign-direct investment and 12-16% of annual corporate profits, much the same as America, but far less than the eu, which provided, on average, 56% of corporate profits in the same period. And only around 3% of German jobs either directly or indirectly depend on exports to China, says Jürgen Matthes of iw. Yet that is not a reason to be less concerned about China, warns Max Zenglein of merics. In the past the assumption was that business in Germany would automatically benefit from investment in China, he says. With German companies increasingly spending on local production and research and development, the bulk of local profits is now often being reinvested there. And in the longer term the “local to local” trend could hurt both German jobs and exports to China. Another cause for concern is the cluster of huge German firms and industries that continue to rely heavily on China. The survival of its large carmakers and chemicals firms could hinge on access to the country. And China supplies 95% of the solar cells installed in Germany as well as 80% of laptops, and 58% of the circuit boards that are integral to other electronic goods. Germany also depends on China for the rare-earth metals needed to make semiconductors and lithium-ion batteries as well as antibiotics and other important medicines. Mr Matthes warns that companies will continue to pour billions into China unless the new policy provides incentives to do otherwise. If China’s threats to Taiwan turn nastier the consequences could be devastating for firms doing an ever-bigger slice of their business there. The latest tentative date for the publication of the new strategy is just after a meeting on June 20th between Olaf Scholz, the German chancellor, and Li Qiang, China’s prime minister. It is high time for a rethink. ■To stay on top of the biggest stories in business and technology, sign up to the Bottom Line, our weekly subscriber-only newsletter. More

Goings-on in mexican telecoms are akin to a telenovela. América Móvil, the empire owned by the country’s richest man, Carlos Slim, stars in every season. So it is with the latest instalment of the soap opera. Televisa, a heavyweight of Mexican broadcasting, at&t, an American telecoms group with big operations in the country, and Mexico’s chamber of telecommunications have asked the Federal Telecommunications Institute (ift), the industry regulator, to order that Telmex, the broadband and fixed-line subsidiary of América Móvil, be split into separate firms with two sets of shareholders. That, its rivals contend, would increase competition.Listen to this story. Enjoy more audio and podcasts on More

General Motors shares are down nearly 6% this week since the company reported its first-quarter results Tuesday morning, despite an earnings beat and guidance raise.
Wall Street analysts say eroding pricing power, labor concerns and challenges in producing electric vehicles will make it harder for GM to perform at the profitability levels it has been.
There’s also growing concern around a union strike and the potential for increased labor costs that could catch up to GM later this year.

Mary Barra, chief executive officer of General Motors Co., during the South by Southwest (SXSW) festival in Austin, Texas, US, on Tuesday, March 14, 2023. 
 Jordan Vonderhaar | Bloomberg | Getty Images

DETROIT – When a company beats Wall Street’s earnings expectations and raises guidance amid recessionary fears and other economic concerns, you would expect the stock to rally.
Look no further to defy that logic than shares of General Motors, which are down nearly 6% this week since the company reported its first-quarter results and raised 2023 guidance Tuesday morning.

Shares closed Wednesday at $32.22 – marking the stock’s lowest closing price since October and 26% off its 52-week high of $43.63 a share. The stock is now down 4.2% for the year.
So, what’s sending the stock lower even as sales are expected to rise and the automaker largely puts years-long supply chain problems in its rearview?
Though GM’s year is off to a good start, the consensus is that the rest of the year is going to prove far more challenging. Wall Street analysts say eroding pricing power, labor concerns and challenges in producing electric vehicles, will make it harder for GM to perform at the profitability levels it has been.
The automaker is painting a rosy picture against the backdrop of a broad normalization in the automotive industry. Record-high vehicle profits and prices, achieved during historically low vehicle inventory levels and resilient consumer demand, are starting to normalize.
“GM continues to do the right things, but we believe cycle normalization and challenges in EV ramp make for a tough investment thesis,” Barclays analyst Dan Levy said in an investor note Wednesday, reaffirming an equal-weight rating but lowering the firm’s price target for the stock by $3 to $42 a share.

GM CFO Paul Jacobson said Tuesday that the company expects flat pricing compared to last year. He said consumers paid an average of $50,263 per vehicle in the U.S. during the quarter, off 1% from a year earlier.
Higher prices are bad news for consumers but great for automakers, as noted by BofA Securities analyst John Murphy in an investor note Wednesday titled, “You hate it, we like it: execution and price drive beat and raise.”

Stock chart icon

GM’s stock price since Mary Barra became CEO of the automaker on Jan. 15, 2014.

GM upped its full-year adjusted earnings expectations to a range of $11 billion to $13 billion on Tuesday, from a previous range of $10.5 billion to $12.5 billion. But those results represent a decline of between 10% and 24% from the roughly $14.5 billion in adjusted earnings it reported in 2022.
Wells Fargo analyst Colin Langan on Wednesday called GM’s guidance raise “surprising given pricing risks, particularly in China, and rising steel costs.” He singled out the company’s pricing expectations, which he called “bullish,” as a chief concern.
GM has shown restraint in not over-producing this year, helping to keep inventories in line with demand and prop up prices. The company idled pickup truck production at a plant in Indiana around the end of the quarter to keep inventories lower than historical levels.
However, it may need such inventory later this year amid growing concerns around a union strike.
GM is approaching negotiations with the United Auto Workers and Canadian union Unifor, which brings the potential for work stoppage and increased labor costs.
Labor costs don’t typically skyrocket as a result of the periodic negotiations, but a new leadership team is in place at the UAW for the first time in decades and promises more contentious negotiations than recent history. The new union leadership ran on platforms of reforming the organization and standing up to automakers.
“We’re here to come together to ready ourselves for the war against the one and only true enemy: multibillion dollar corporations and employers who refuse to give our members their fair share,” new UAW President Shawn Fain told members during a union convention last month in Detroit. “It’s a new day in the UAW.”
Labor strikes can be costly and deplete vehicle inventories. A 40-day strike against GM during the last round of negotiations four years ago cost GM about $3.6 billion in 2019, including $2.6 billion in earnings before interest and taxes during the fourth quarter.
GM CEO Mary Barra told investors Tuesday the automaker is working to “build a strong relationship with the new leadership” but declined to speculate on the talks and the company’s expectations for the negotiations.
“We’re working to make sure we’re building a strong relationship with the new leadership, getting to know them and making sure we identify what are the challenges of the business and then it becomes working together to solve the issues to get to a good place,” she said.
Shares of GM under Barra, who became CEO in January 2014, are down 19.5% since she took the helm and off 52% from a high of $67.21 achieved during intraday trading on Jan. 5, 2022. Their low under her tenure was $14.33 a share on March 18, 2020.
– CNBC’s Michael Bloom contributed to this report. More

Oddity is investing more than $100 million to acquire biotech startup Revela and open a U.S.-based lab.
The company behind Il Makiage will use AI-based molecule discovery, a common tool in pharmaceutical drug development, to target cosmetics pain points like hair loss and aging.
The new molecules will be used in existing Il Makiage and Spoiled Child products.

Courtesy: Oddity

The beauty and wellness platform behind Il Makiage and Spoiled Child is investing more than $100 million to acquire a biotech startup and open a U.S.-based lab in a bid to make the most effective cosmetic products on the market, the company announced Thursday.
Oddity is buying startup Revela for $76 million, its largest acquisition to date, and is putting another $25 million toward building Oddity Labs in Boston. The merger will bring to Oddity a team of scientists tasked with creating brand-new molecules, using artificial intelligence, that can be used in its cosmetics brands and future lines.

AI-based molecule discovery is a common tool used in the pharmaceutical industry to create new drugs, but it isn’t widely used in the beauty and wellness industry. Legacy brands have long relied on building products using proprietary formulations with a similar set of active ingredients, such as retinol, hyaluronic acid and peptides. 
“While my competitors are doing more of the same for decades and serving consumers with the same ingredients in the same old channels, we are building the future of the category,” Oddity’s co-founder and CEO, Oran Holtzman, told CNBC in an interview. 
“With this acquisition, we are using biologics to bring game-changing, science-backed beauty and wellness products to the market and to our users. This is our DNA, we are not here to do more of the same but to build something new,” he said.
Oddity hopes to develop new molecules designed to address specific pain points, such as hair loss, wrinkles and the myriad other concerns consumers have long turned to legacy brands to solve with varying results. 
“People ask … why doesn’t pharma go into beauty?” said Evan Zhou, Oddity’s new chief science officer and Revela’s co-founder and CEO. 

“I think it’s very hard because the cultures don’t align, right? So pharmaceutical companies kind of look down upon beauty, right? Because that’s not what they went into this industry for,” he said. “Everybody wants to cure cancer, that’s why people became scientists.” 

(L to R): Dr. David Zhang, Oddity’s new head of bioengineering and the chief science officer and co-founder of Revela; Oddity co-founder Shiran Holtzman-Erel; Oddity co-founder and CEO Oran Holtzman; Dr. Evan Zhou, Oddity’s new chief science officer and Revela’s co-founder and CEO.
Alberto Vasari for ODDITY

Zhou said legacy beauty and wellness companies have traditionally faced difficulties in attracting top scientific talent. As a result, the industry has lagged in innovation and instead focused its investments on branding and marketing, he said.
But after personal experience with the limitations of beauty products — watching his mom spend thousands on hair serums that failed to reverse her hair loss, or seeing his wife buy pricey moisturizers with dubious promises — Zhou was inspired to bring his biotech prowess to the beauty and wellness industry to create products that could definitively work. 
“I want someone who has issues to be able to ask something online, to be able to take a picture and then get the solution,” Zhou said. “I want them to be able to say, ‘Oh, yeah, I’m having, you know, this kind of hair loss, or I’m having these wrinkles here,’ and for us to be able to spit out a solution that works 100% of the time.”
Revela has developed two novel molecules that are already on the market in early stages – ProCelinyl, which boosts hair growth, including lashes and eyebrows, and Fibroquin, an anti-aging ingredient that Zhou says rivals the benefits of retinol — without the side effects. 
Those molecules, and more that are currently in development, will be added to Oddity’s existing product lines and to future brands that are in the works. 
“We have this very special opportunity to really deliver and create game-changing products with brand-new science-backed ingredients that the beauty giants of the world can only dream of,” said David Zhang, Oddity’s new head of bioengineering and co-founder and chief science officer of Revela. 
Joining forces with Oddity gives Revela a “direct line to consumers at this incredible scale,” Zhang said. “Oddity knows exactly where the pain is most acute so you can imagine the best molecules for the most pressing issues.”
Launched in 2018 by Holtzman and his sister Shiran Holtzman-Erel, Oddity uses data and AI to develop brands and make tailored product recommendations for customers.
In 2022, the direct-to-consumer platform brought in $395 million in gross revenue and $500 million in sales, the company said. Those numbers don’t include returns. The 2022 sales figures represent slightly more revenue than earlier, preliminary results for the period.  More

Merck reported first-quarter revenue that fell 9% year over year due to a steep drop in sales of its Covid antiviral treatment molnupiravir. 
Sales of molnupiravir plunged to $392 million during the period, down 88% from the $3.2 billion the pharmaceutical giant reported in the first quarter of 2022.
Merck’s revenue and adjusted earnings for the quarter still topped Wall Street’s expectations.

Medicine pill is seen with Merck logo displayed on a screen in the background in this illustration photo taken in Poland on October 4, 2021.
NurPhoto | NurPhoto | Getty Images

Merck on Thursday reported first-quarter revenue that fell 9% from the same period a year ago largely due to a steep drop in sales of its Covid antiviral treatment molnupiravir. 
Sales of molnupiravir plunged to $392 million during the period, down 88% from the $3.2 billion reported in the first quarter of 2022. Merck said the decrease is primarily the result of lower sales in the U.S., U.K., Japan and Australia. 

The company reported total revenue of $14.5 billion during the quarter, down nearly $1.5 billion from the same period a year ago. But excluding the Covid drug, Merck said its revenue grew 11%. 
Here’s what Merck reported compared with Wall Street’s expectations, based on a survey of analysts by Refinitiv:

Earnings per share: $1.40 adjusted, vs. $1.32 expected
Revenue: $14.49 billion, vs. $13.78 billion expected

Merck’s stock rose more than 2% in premarket trading Thursday. Shares are up more than 2% for the year through Wednesday’s close, putting the company’s market value at nearly $288 billion.
The pharmaceutical giant posted a net income of $2.82 billion, or $1.11 per share. That compares with a net income of $4.31 billion, or $1.70 per share, for the same period a year ago. Excluding certain items, Merck’s adjusted earnings per share were $1.40 for the period. 
The Rahway, New Jersey-based company is now forecasting 2023 sales of $57.7 billion to $58.9 billion, slightly higher than the $57.2 to $58.7 billion guidance provided in early February. The lifted guidance includes approximately $1 billion in sales of molnupiravir.

The company also raised its full-year adjusted earnings outlook to $6.88 to $7.00 per share, from a previous forecast of $6.80 to $6.95 per share.
The forecast does not reflect any financial impact from Merck’s proposed acquisition of biotech company Prometheus Biosciences earlier this month, the company noted. Merck said that deal is expected to close in the third quarter of 2023.
Merck’s molnupiravir treatment first entered the market after the Food and Drug Administration authorized the pill for certain adults in December 2021. Once hailed as a game-changing treatment for Covid-19, Merck signed several contracts to supply millions of courses of the drug to the U.S. government and other nations. 
But Merck and drugmakers such as Pfizer, Moderna and Johnson & Johnson have been bracing for a drop-off in Covid-related sales this year as the world emerges from the pandemic and relies less on blockbuster vaccines and treatments. 
Molnupiravir weighed on sales for Merck’s pharmaceutical business, which declined 10% to $12.7 billion compared with the first quarter of 2022. Excluding molnupiravir, pharmaceutical sales grew 14%. 
Merck said diabetes treatments also drove the sales decrease. Sales of sitagliptin and a similar diabetes treatment fell 29% to $880 million during the quarter, primarily due to generic competition in several international markets and lower demand and pricing in the U.S.
But Merck’s pharmaceutical unit saw higher sales of the blockbuster antibody treatment Keytruda, which increased 20% to $5.8 billion during the quarter. Keytruda is used against several types of cancer, including certain types of breast cancer and skin cancer. 
Sales of Gardasil, Merck’s vaccine that prevents cancer from HPV, also grew 35% to $2 billion. The company said the growth reflects strong demand outside of the U.S., particularly in China. 
Merck will hold an earnings conference call at 9:00 a.m. ET. More