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Merck on Tuesday said it will slash $3 billion in costs by the end of 2027 to be fully reinvested to support new product launches and its drug pipeline. 
The multi-year effort comes as Merck prepares to offset revenue losses from the upcoming patent expiration of its blockbuster cancer drug Keytruda in 2028, and braces for the Trump administration’s planned tariffs on pharmaceutical imported into the U.S.
Merck also posted second-quarter revenue that missed estimates and narrowed its full-year guidance.

Merck & Co. signage on the floor of the New York Stock Exchange (NYSE) in New York, US, on Tuesday, April 8, 2025.
Michael Nagle | Bloomberg | Getty Images

Merck on Tuesday said it will slash $3 billion in costs by the end of 2027 to be fully reinvested to support new product launches and its drug pipeline. 
The multi-year effort comes as Merck prepares to offset revenue losses from the upcoming patent expiration of its blockbuster cancer drug Keytruda in 2028. It also comes as drugmakers brace for President Donald Trump’s planned tariffs on pharmaceuticals imported into the U.S., which has prompted Merck and other companies to invest billions to boost their manufacturing footprints in the U.S. 

Shares of the pharmaceutical giant fell roughly 3% in premarket trading on Tuesday.
“Today, we announced a multiyear optimization initiative that will redirect investment and resources from more mature areas of our business to our burgeoning array of new growth drivers, further enable the transformation of our portfolio, and drive our next chapter of productive, innovation-driven growth,” said Merck CEO Rob Davis in prepared remarks for the company’s earnings call.
He added that his confidence in Merck’s ability to navigate Keytruda’s loss of exclusivity increases with every new product launch, data readout and business deal. Davis said he sees that patent expiration “as more of a hill than a cliff, and I’m confident in our ability to grow over the long-term.”
As part of the effort, Merck in July approved a new restructuring program that will eliminate certain administrative, sales and research and development positions. But the company will continue to hire employees in new roles across growth areas of its business. Merck will also reduce its global real estate footprint and continue to pare back its manufacturing network. 
Merck expects actions under the restructuring program to generate around $1.7 billion in annual cost savings, most of which will kick in by the end of 2027. 

The company expects pretax costs related to the restructuring program to be approximately $3 billion in total. For its second quarter, Merck recorded a $649 million charge related to the program. 
Also on Tuesday, Merck reported second-quarter revenue that came in short of Wall Street estimates. It was the first time that metric had missed expectations since April 2021.
While Keytruda sales grew during the period, Merck continued to see trouble with China sales of Gardasil, a vaccine that prevents cancer from HPV, the most common sexually transmitted infection in the U.S.
In February, Merck announced a decision to halt shipments of Gardasil into China beginning that month and going through at least mid-2025. In prepared remarks, CFO Caroline Litchfield said the company will not resume shipments to China through at least the end of 2025, noting that inventories remain high and demand is still soft.
The company also narrowed its full-year guidance. Merck now expects its 2025 adjusted earnings to come in between $8.87 and $8.97 per share. That compares to its previous outlook of $8.82 to $8.97 per share.
Merck expects revenue for the year to come in between $64.3 billion and $65.3 billion, narrowed on both ends from its previous guidance of $64.1 billion to $65.6 billion. 
Here’s what Merck reported for the second quarter compared with what Wall Street was expecting, based on a survey of analysts by LSEG: 

Earnings per share: $2.13 adjusted. That figure may not be comparable to estimates of $2.01.
Revenue: $15.81 billion vs. $15.89 billion expected

Merck said its guidance includes the previously announced $200 million estimated impact associated with the tariffs Trump has implemented to date. In April, the company said the expected tariff charge primarily reflects levies between the U.S. and China, but did not account for sector-specific pharmaceutical tariffs. 
The outlook also includes one-time charges related to the company’s license agreements with Hengrui Pharma and LaNova, but not its recently announced acquisition of Verona Pharma. 
The company posted net income of $4.43 billion, or $1.76 per share, for the quarter. That compares with net income of $5.46 billion, or $2.14 per share, during the year-earlier period. 
Excluding acquisition and restructuring costs, Merck earned $2.13 per share for the second quarter. That includes a charge of 7 cents per share for closing the license agreement with Hengrui Pharma.
Merck raked in $15.81 billion in revenue for the quarter, down 2% from the same period a year ago.

Pharmaceutical, animal health sales

Merck’s pharmaceutical unit, which develops a wide range of drugs, booked $14.05 billion in revenue during the second quarter. That’s down 2% from the same period a year earlier.
Keytruda recorded $7.96 billion in revenue during the quarter, up just 9% from the year-earlier period. 
That increase was driven by higher uptake of Keytruda for earlier-stage cancers and strong demand for the drug for metastatic cancers, which spread to other parts of the body, the company said. Analysts had expected the drug to see $7.9 billion in sales, according to StreetAccount estimates.  
Gardasil generated sales of $1.13 billion for the quarter, down 55% from the same period a year ago due to lower demand in China. Analysts had expected Gardasil to book sales of $1.33 billion, StreetAccount estimates said. 
The Chinese market makes up the majority of the blockbuster shot’s international revenue. Merck is hoping that Gardasil’s expanded approval for men ages 9 to 26 in China will help boost uptake of the vaccine.
Sales of Gardasil in the U.S. increased 2% during the second quarter. 
Meanwhile Merck’s newer drug Winrevair, which is used to treat a rare, deadly lung condition, recorded $336 million in sales for the quarter. Analysts had expected the drug to bring in $324.7 million, according to StreetAccount estimates.  
Merck’s animal health division, which develops vaccines and medicines for dogs, cats and cattle, posted nearly $1.65 billion in sales, up 11% from the same period a year prior. The company said higher demand for livestock products and sales from Elanco’s aqua business, which it acquired last year, drove that growth. More

Spirit will furlough 270 pilots, effective Nov. 1, as it prepares for a smaller flight schedule.
The carrier emerged from Chapter 11 bankruptcy in March, but the industry is now facing weaker-than-expected demand for coach-class tickets.
The airline furloughed hundreds of pilots last year.

A Spirit Airlines Airbus A320 taxis at Los Angeles International Airport after arriving from Boston on September 1, 2024 in Los Angeles, California.
Kevin Carter | Getty Images News | Getty Images

Spirit Airlines said Monday that it will furlough 270 pilots this fall as the carrier prepares for a smaller off-season schedule to try to find its financial footing.
The airline will also downgrade 140 pilots from captain to first officer, according to a note to aviators from the Air Line Pilots Association, their union. Those downgrades take effect on Oct. 1.

“We know how hard this news hits, and there’s no dressing that up. Spirit continues to shrink, and with it, the value of pilot seniority and Spirit careers continues to erode,” said Ryan Muller, a captain and the chairman of Spirit’s ALPA chapter.
The furloughs take effect on Nov. 1 “to better align staffing with our flight schedule,” the airline said.

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Spirit emerged from Chapter 11 bankruptcy in March and has been trying to win over customers with more upscale travel options, which have fared better than the bare-bones coach tickets Spirit has been known for for years.
“We are taking necessary steps to ensure we operate as efficiently as possible as part of our efforts to return to profitability,” Spirit said in a statement to CNBC.
Airlines across the industry have said demand has been softer this year, particularly in off-peak travel periods.

“We recognize the weight of this decision and are committed to treating all affected Team Members with compassion and respect during this process,” Spirit said.
Spirit also announced hundreds of pilot furloughs last year as it approached its bankruptcy filing. More

Los Angeles real estate dominated the list of the top 10 most expensive homes sold in June, according to Redfin.
Paris Hilton and her husband, Carter Reum, led the way, buying a $63 million Beverly Hills mansion that once belonged to Mark Wahlberg.
Buyers displaced by the fires remain the big drivers of luxury real estate sales in LA, but foreign buyers, especially from China, are also coming back, said agent Nicole Plaxen.

Agent Nicole Plaxen of The Beverly Hills Estates said she’s holding “constant showings” of this $118 million mansion in Bel Air.
Credit: The Beverly Hills Estates

A version of this article first appeared in CNBC’s Inside Wealth newsletter with Robert Frank, a weekly guide to the high-net-worth investor and consumer. Sign up to receive future editions, straight to your inbox.
When actor and entrepreneur Mark Wahlberg sold his Beverly Hills mansion in 2023 for $55 million, many brokers said the price was low.

Wahlberg had listed the 30,500-square-foot home for $87.5 million but slashed the price in order to close before Los Angeles’ looming mansion tax took effect.
Perhaps he should have waited.
That home was the most expensive sale in June, flipped for $63 million, giving the sellers a profit even after accounting for LA’s mansion tax. The buyers this time around: Paris Hilton and her husband, Carter Reum, whose Malibu home was destroyed in the wildfires.

US media personality Paris Hilton attends the Vanity Fair Oscars Party at the Wallis Annenberg Center for the Performing Arts in Beverly Hills, California, on March 10, 2024.
Michael Tran | Afp | Getty Images

Los Angeles real estate dominated the charts of the top 10 most expensive homes sold in June, according to Redfin. Five of the 10 top sellers were in California, with three in Beverly Hills, one in Bel Air and one in Atherton.
Nicole Plaxen, an agent with The Beverly Hills Estates, said buyers displaced by the fires remain the big drivers of luxury real estate sales in LA. But she said rising demand from foreign buyers, especially from China, is also fueling deals in Beverly Hills and Bel Air.

“I see this strength continuing based on the activity I’m seeing right now,” she said. “We’ve been showing every single day nonstop.” She said her $118 million listing on Bel Air Road and $68 million one on Flicker Way have both seen strong interest.

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Plaxen was a listing agent on the sale of a $32 million LA spec home to Richard Saghian, the CEO of Fashion Nova. Saghian will use the property as a temporary home while he finishes improvements on his Bel Air megamansion known as The One. Saghian bought The One, which spans over 100,000 square feet, at auction for $126 million in 2022 — $141 million with fees and commissions. 
Plaxen said another LA property recently sold off market for around $60 million and other high-end listings are rapidly coming onto the market.
“People are not just looking, they’re putting pen to paper,” she said.
Florida, which typically dominates the top 10 lists, had three top 10 sales in June, including the $38.8 million sale of a Palm Beach spec house.

Here are the other top 10 listings in the U.S. in June, according to Redfin:

71 Beverly Park, Beverly Hills, CA 90210: Sold for $63.1 million
55 E. San Marino Dr., Miami Beach, FL 33139: Sold for $46 million
1742 S. Ocean Blvd., Palm Beach, FL 33480: Sold for $38.8 million
9 W. 54th St., New York, NY 10019: Sold for $38.2 million
1806 US Highway 50, Unit 2, Glenbrook, NV 89413: Sold for $37.5 million
690 Island Dr., Palm Beach, FL 33480: Sold for $33 million
1120 Wallace Ridge, Beverly Hills, CA 90210: Sold for $32 million
750 Lausanne Rd., Los Angeles, CA 90077: Sold for $32 million
1414 Donhill Dr., Beverly Hills, CA 90210: Sold for $32 million
96 Ridge View Dr., Atherton, CA 94027: Sold for $31.8 million More

America’s tech giants are masters of the digital realm. Yet as they bet stupendous sums on artificial intelligence (ai), their ambitions are facing constraints in the physical world. Shortages of chips and data-centre equipment such as transformers and switching gear mean soaring prices and lengthy waits. Just as pressing is access to energy as utilities struggle to match the demands of Silicon Valley. On July 24th President Donald Trump published an “ai action plan” which describes America’s stagnating energy capacity as a threat to the country’s “ai dominance”. How is big tech coping with a worsening power crunch? More

Warner Bros. Discovery’s streaming and studios division will be called “Warner Bros.” and its global networks segment will be called “Discovery Global” when it splits into two companies.
The media giant also announced the members of new executive leadership teams for both businesses.
The company expects to separate in mid-2026.

David Zaslav, President and CEO of Warner Bros. Discovery, attends the Milken Institute Global Conference 2025 in Beverly Hills, California, U.S., May 7, 2025.
Mike Blake | Reuters

Warner Bros. Discovery on Monday announced the corporate names and leadership teams of its two future businesses as the company prepares to split in mid-2026.
Its streaming and studios division will be called “Warner Bros.” and its global networks segment will be named “Discovery Global.”

Warner Bros. will house its movie properties, including DC Studios and its streaming service HBO Max. Meanwhile, Discovery Global will include its entertainment, sports and news networks, including CNN, TNT Sports in the U.S., Discovery, the Discovery+ streaming service and Bleacher Report.
“Over the past several years, we have made important strides across the business, launching and investing in a profitable, global streaming service and reinvigorating our studios to return them again to an industry leading position,” said WBD President and CEO David Zaslav in a statement.
The company announced the split last month as WBD tries to navigate an industry-wide shift in consumers’ viewing habits from traditional cable to streaming. The spinoff will create two publicly traded businesses, following a similar move by Comcast to split off its cable assets, including CNBC, in the coming months.
The new names announced by Warner Bros. Discovery are a callback to the two entities that existed before the company’s merger: WarnerMedia and Discovery, Inc. That deal completed in 2022.
WBD also announced its top executives for both divisions, including 13 leaders for Warner Bros. and 16 at Discovery Global. Zaslav will lead Warner Bros., while current Warner Bros. Discovery CFO Gunnar Wiedenfels will become CEO of Discovery Global.

“With our unmatched portfolio of storytelling IP coupled with our incredible creative partners, and now an executive team of proven, bold, and committed creative and corporate leaders, we are in a strong position to launch and continue to meaningfully grow a company worthy of our storied past,” Zaslav said.
Disclosure: Comcast NBCUniversal is the parent company of CNBC. More

The Las Vegas Sphere will soon screen 1939’s “The Wizard of Oz” in a new immersive film experience.
Engineers used artificial intelligence “outpainting” to expand the original film frames to fit the immersive space, CBS Sunday Morning reported.
“The Wizard of Oz” experience opens to the public on Aug. 28.

Jack Haley (1898 – 1979) as the Tin Man, Bert Lahr (1895 – 1967) as the Cowardly Lion, Judy Garland (1922 – 1969) as Dorothy, Ray Bolger (1904 – 1987) as the Scarecrow and Frank Morgan (1890 – 1949) as the Doorman to the Emerald City in “The Wizard of Oz.”
Silver Screen Collection | Moviepix | Getty Images

The Las Vegas Sphere will soon screen 1939’s “The Wizard of Oz” in a new immersive film experience.
The project places viewers inside the world of Oz using the Sphere’s 160,000-square-foot wraparound screen. The film will play in 16K resolution with full spatial audio using 167,000 speakers and haptic seating, according to a June press release.

In a partnership with Google Cloud, engineers used AI “outpainting” to expand the original film frames to fit the immersive space, according to an April press release.
“Our standard on this was not to modify the film at all, but to try and bring you into [it] as if you were in the studio when it was shot,” James Dolan, Sphere Entertainment CEO, told CBS Sunday Morning.
Glenn Derry, MSG Ventures executive vice president and visual effects artist, is in charge of the 4D effects, such as motion, wind, water and scent, to make audiences feel like they are in Oz, CBS reported. Derry told CBS Sunday Morning that his team used technology to bring in fog and wind effects to mimic tornadoes that are seen in the movie.
“The Wizard of Oz” experience opens to the public on Aug. 28.
The Las Vegas Sphere opened in September 2023 and has a capacity of roughly 20,000. About 10,000 of the seats in the arena have haptic technology, according to Sphere Entertainment. The venue has garnered attention since its opening for impressive live concerts and unique visuals.

It’s previously screened films including “Postcard From Earth.”

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Correction: This story has been to updated to correct that the Las Vegas Sphere has previously screened films. More

UnitedHealth’s second-quarter earnings comes two and a half months since Chairman and CEO Stephen Hemsley retook the role of chief executive.
Investors will be watching for how Hemsley plans to stabilize the company’s embattled Medicare Advantage program and Optum Health physician practices.
The company pledged to provide new guidance on 2025 earnings with the release, after suspending its outlook in May following an abrupt change of leadership.

UnitedHealth Group Chairman and CEO Stephen Hemsley will face the first real test Tuesday of his ability to regain investor confidence as the largest private U.S. insurer reports earnings.
The Dow component has seen its share price cut nearly in half since mid-May, with the stock on pace for its worst year in more than a decade, after earnings in its flagship Medicare program and Optum Health physician practices plummeted. That led to the abrupt resignation of former CEO Andrew Witty, forcing the company to reinstate ex-CEO Hemsley to replace him and suspend earnings guidance. On top of that, the company is facing criminal and civil Department of Justice investigations into its Medicare billing practices.  

As UnitedHealth faces challenges on multiple fronts, it sits in a “perfect storm,” said Mizuho Securities analyst Ann Hynes. Now, investors want to know how Hemsley plans to steer the company out of the whirlwind, after assuring them last June that “we’re humbly determined to earn back your trust and your confidence.”
Here are three key things investors will be looking for from the company’s earnings report.

The big number: 2025 guidance

More so than the second-quarter numbers, analysts are focused on UnitedHealth’s outlook for the full year. Hemsley told investors the company would provide an update on 2025 earnings guidance, after it suspended its forecast in May.
Analysts expect UnitedHealth to post adjusted full-year earnings of $21.26 per share, according to consensus estimates from LSEG. Estimates range from a low of $18 per share to a peak of $26.44 a share.
“Anything below $18 — that would be viewed as a negative by the street,” Hynes said

RBC Capital Markets analyst Ben Hendrix has set his estimate above consensus at $23.36, but said Wall Street remains bearish on UnitedHealth.
“While we base our more optimistic outlook on management’s assertion that Medicare Advantage remains profitable with the 3% low-end of target MA margin in sight for 2026, clients we’ve spoken to have expressed concern over continued margin compression in OptumHealth and accelerating (medical cost) trend in core Medicare Advantage,” he wrote in a note earlier this month.

Medicare Advantage and Optum Health outlook

Analysts are also focused on how the company plans to stabilize its physician practice unit, Optum Health. For years, it helped UnitedHealth outperform its peers in its flagship Medicare Advantage program, by leveraging its 90,000 employed or affiliated doctors to treat patients on UnitedHealth’s own plans.
“Investors with duration were investing in United really for the power of … Optum Health, the power of United steering their own Medicare Advantage members, extracting considerable margin that they hadn’t been able to before,” said Baird analyst Michael Ha.
But in the first quarter this year, Optum Health saw a sharp decline in profits. Analysts said the plunge was due in part to a Biden-era change in Medicare reimbursement standards known as V28, which is making it harder for insurers and doctors to bill for extra services.
Mizuho’s Hynes said prior billing coding rules left a lot more room for plans to add billing codes related to chronic conditions, such as overall heart conditions, which would provide a higher risk score and reimbursement rate. Under the new V28 rule the billing codes are more specific, closing loopholes that could boost reimbursement.
“V28 is very black and white, so you don’t have that kind of ability to add codes, and a lot of codes are removed,” she said, adding that has now “led to a structural shift in margins for Optum Health.”
But Ha noted the V28 changes began in 2024, at a time when seniors started utilizing more care. Many of UnitedHealth’s Medicare Advantage competitors made adjustments over the last year to address the shift.  The sudden collapse of Optum Health margins in the first quarter appears to have caught UnitedHealth off guard.
“I think it’s an example of misexecution. They knew the headwind heading into the year and even well before then, but for one reason or another couldn’t find the offset,” Ha said. “We’re still confident that Optum Health and United can recover and rebuild unit economics, but we think over the next one to two years, it may potentially worsen.”

Legal and regulatory issues

The company got out ahead of the earnings report on Thursday, acknowledging in an SEC filing that its Medicare program billing practices face criminal and civil probes by the Department of Justice. 
UnitedHealth said the company is cooperating the with the investigations, first reported by the Wall Street Journal. It also noted that in March, a court-appointed special master ruled in the company’s favor in a case involving similar allegations brought by the DOJ during the first Trump administration.
Hynes believes investor concern over the DOJ probes has been overblown.
“The stock is trading like the government’s going to kick them out of Medicare and Medicaid, and the likelihood of that is zero, in my view,” she said. “It will probably end up with them writing a check and doing a Corporate Integrity Agreement … that’s what has happened in the past.”
But the shooting death of UnitedHealth executive Brian Thompson last December, which prosecutors allege was carried out by a gunman who was motived by insurance denials, unleashed a groundswell of public criticism of health insurers’ practices. 
Former whistleblower Wendell Potter, who has criticized industry practices after a career at Cigna, said the pressure on large insurers like UnitedHealth likely will not cease. Regulatory scrutiny in Congress has increased on both sides of the aisle, as Washington grapples with high health and drug costs in Medicare, Medicaid and other government health programs.
“A lot of the members of Congress who are doctors or Republicans, some are pharmacists, and they see firsthand the heavy hand of these companies,” said Potter, president of the Center for Health and Democracy. “And so you’re seeing interest by Republicans, and I’ve not seen that before.”
In June, UnitedHealth announced that it had hired third party auditors to conduct a review of the company’s practices in health insurance and pharmacy benefits services, in an effort “to provide our stakeholders transparency and confidence” in the company’s business practices.
The company told CNBC it will not have many details to offer about that audit during the second-quarter earnings call. It does not expect the review to be completed until the end of the third quarter of this year. More

Disney and Marvel’s “Fantastic Four: First Steps” opened to an estimated $118 million at the domestic box office.
Internationally, the latest Marvel Cinematic Universe film snared an estimated $100 million, bringing its global weekend haul to $218 million.
“Fantastic Four: First Steps” has an 88% “Fresh” rating from review aggregator Rotten Tomatoes.

(L-R): Ebon Moss-Bachrach as Ben Grimm/The Thing, Vanessa Kirby as Sue Storm/Invisible Woman, Pedro Pascal as Reed Richards/Mister Fantastic and Joseph Quinn as Johnny Storm/Human Torch in Marvel’s “The Fantastic Four: First Steps.”

What superhero fatigue?
Twice in one month, a comic book film has rocketed to the top of the box office, debuting with more than $100 million in ticket sales.

Two weeks ago, it was “Superman,” the first theatrical release from James Gunn and Peter Safran as co-heads of DC Studios at Warner Bros. Discovery. This weekend, Disney and Marvel’s “Fantastic Four: First Steps” fueled an estimated $118 million in ticket sales during its first three days in theaters.
“The lesson is that if you build great movies, audiences will head to the multiplex,” said Paul Dergarabedian, senior media analyst at Comscore.
Internationally, “Fantastic Four: First Steps” snared an estimated $100 million, bringing its global weekend haul to $218 million.
“Marvel bet big releasing their long-awaited introduction of the Fantastic Four as the last MCU film to hit theaters for at least another year, and it’s paying off,” said Shawn Robbins, director of analytics at Fandango and founder of Box Office Theory. “The franchise has had its share of hiccups in recent years, but Marvel’s First Family is winning over fans and spurring the kind of enthusiasm that could bring back casual viewers who sat out some post-‘Endgame’ chapters.”
Marvel has struggled in the wake of the record-breaking “Avengers: Endgame,” the culmination of more than a decade of interconnected storytelling. While films like “Deadpool & Wolverine” and “Guardians of the Galaxy: Vol. 3” enticed moviegoers to theaters, others like “Captain America: Brave New World,” “The Marvels” and “Ant-Man and the Wasp: Quantumania” failed to drum up the same enthusiasm.

Box office hauls haven’t been the only hit-or-miss for the studio. Marvel films have experienced significant fluctuations since the release of 2019’s “Endgame.” Previously, no MCU film had a Rotten Tomatoes score below 67%, meaning each had earned the title of “Fresh,” indicating that critics had a generally positive view of the film.
Since then, five films from the franchise have been below that metric and three of those were considered “Rotten,” earning less than 50% positive reviews.
This year, “Captain America: Brave New World” tallied $413 million globally and earned a 48% rating on Rotten Tomatoes. But “Thunderbolts*” generated just $382 million globally — one of only five titles under the Marvel Cinematic Universe banner to tally less than $400 million worldwide — it secured an 88% “Fresh” rating.
Its newest theatrical entry, “Fantastic Four: First Steps,” also has an 88% “Fresh” rating from the site.
“For Disney, this has truly been a magical summer and for Marvel a reaffirmation that their strategy to revamp the brand is certainly working,” Dergarabedian said. “With ‘The Fantastic Four: First Steps’ following in the footsteps of ‘Thunderbolts*’ Marvel is showing that a focus on quality rather than quantity is a recipe for success.”
Disclosure: Comcast is the parent company of NBCUniversal and CNBC. NBCUniversal owns Fandango and Rotten Tomatoes. More