TLDR
- Merck KGaA Q1 net profit fell 9.4% year-on-year to €669 million, but beat EPS forecasts of €1.99 with a print of €2.11.
- Net sales dipped 2.8% to €5.13 billion, also topping estimates of €5.09 billion.
- The company raised its 2026 adjusted EBITDA guidance to €5.7–€6.1 billion, up from €5.5–€6.0 billion.
- Electronics was a standout, driven by AI and high-performance computing materials demand.
- Generic competition for MS drug Mavenclad was pushed back from March to May, giving Life Science more runway.
Merck KGaA posted a mixed but better-than-feared first quarter on Wednesday, with profits down but beating Wall Street’s bar on both earnings and sales. The stock jumped 8% to a two-month high following the results.
Net profit came in at €669 million, down 9.4% from the same period last year, or €2.11 per share — ahead of forecasts for €1.99. Net sales slipped 2.8% to €5.13 billion, edging past estimates of €5.09 billion. Foreign exchange headwinds took a bite, but underlying demand held up better than expected.
Merck KGaA Q1 26 Earnings:
-Net Sales: €5.13B (est €5.08B)
– Adj EBITDA: €1.53B (est €1.46B)
– Adj EPS: €2.11 (est €1.95)
– Sees FY Net Sales: €20.4B To €21.4B (est €20.89B)
– Sees FY Adj EBITDA: €5.7B To €6.1B (est €5.84B)
– Sees FY Adj EPS: €7.30 To €8.20, Saw…— First Squawk (@FirstSquawk) May 13, 2026
The company also lifted its full-year 2026 guidance, a move that clearly pleased investors.
Adjusted EBITDA for the year is now expected to land between €5.7 billion and €6.1 billion, compared to the previous range of €5.5 billion to €6.0 billion. Net sales guidance was set at €20.4 billion to €21.4 billion. Organic sales growth outlook was raised to 0%–3% from the prior -1% to 2%.
Electronics Leads the Way
The Electronics division was the standout performer in the quarter. Demand for materials used in advanced semiconductors — particularly those tied to AI infrastructure and high-performance computing — drove solid growth.
This isn’t a new trend for Merck, but the AI-driven demand cycle continues to provide a reliable tailwind for the unit.
First-quarter adjusted EBITDA for the group came in at €1.53 billion, down just 0.3%, and well ahead of analyst consensus of €1.46 billion.
Life Science Gets Extra Time
The Life Science division also came in stronger than expected. Revenue grew 8.3% on a currency-adjusted basis, helped in part by a customer filling a new warehouse and others stockpiling lab supplies due to supply chain disruptions linked to the Iran war.
Merck had previously warned that U.S. sales of its multiple sclerosis drug Mavenclad would start dropping in March after generic copies hit the market. That date has now been pushed to May, giving the division a few extra weeks of full-priced sales.
To replace Mavenclad’s revenue over time, Merck is counting on therapies for rare cancer types acquired through its $3.9 billion purchase of SpringWorks Therapeutics last year.
Morgan Stanley analyst Thibault Boutherin said he expects Merck to outperform following the Q1 beat, adding that implied full-year numbers, including better FX, suggest 1% upside to consensus EBITDA and EPS estimates.
The results also mark an early win for new CEO Kai Beckmann, who was promoted from head of the electronics division earlier this month.
Organic EPS guidance was raised to €7.50–€8.20, up from €7.10–€8.00, while EBITDA organic growth guidance moved to -2% to 2% from the prior -4% to 1%.
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