Merck (NYSE:MRK) delivered a strong second quarter, reporting an EPS of $2.28, which beat analysts' expectations by $0.12. The pharmaceutical giant also surpassed revenue forecasts, posting $16.11 billion against the consensus estimate of $15.85 billion. Despite these positive results, the company's stock dropped around 10% intra-day today.

Robert Davis, Merck's Chairman and CEO, attributed the robust quarterly performance to "excellent scientific, commercial, and operational execution." He highlighted the successful U.S. launch of WINREVAIR and favorable European opinions for adults with pulmonary arterial hypertension (PAH). Notably, sales of KEYTRUDA, Merck's flagship cancer drug, grew by 16% to $7.3 billion, significantly contributing to the quarter's success.

Merck's total worldwide sales increased by 7% compared to the same quarter last year, and 11% when adjusted for foreign exchange impacts. This growth was driven by a favorable product mix and reduced royalty rates on key products such as KEYTRUDA and GARDASIL/GARDASIL 9.

Looking ahead, Merck has raised its full-year 2024 sales forecast to a range of $63.4 billion to $64.4 billion, with the midpoint slightly below the Street estimate of $64.3 billion. However, the company's full-year adjusted EPS guidance has been set between $7.94 and $8.04, below the consensus estimate of $8.16 and revised down from the previous guidance range of $8.53 to $8.65. This adjustment reflects a one-time charge of approximately $1.3 billion, or $0.51 per share, related to the acquisition of EyeBio.