Merck (MRK) earnings preview: what to watch in Q3 2026

When the results come out

Merck will report its third-quarter 2026 sales and earnings on Thursday, October 29, 2026. The date comes from the company's own press release announcing the conference call.

What last quarter showed

Our Q2 2026 analysis found a growing business whose profit per share went nowhere:

• Sales rose 5.1% to $16,607 million (4% excluding currency). Keytruda and its new under-the-skin version Keytruda Qlex brought in $8,366 million, up 5.2% and still 50.4% of total sales. Newer drugs grew much faster: Winrevair +75% to $588 million, Welireg +67% to $271 million, Capvaxive +42% to $184 million.
• Merck posted a $1,335 million net loss (−$0.54 a share) because the $6.8 billion Terns Pharmaceuticals purchase was expensed at once: a $5.7 billion charge with no tax deduction.
• Underneath the deal charge, EPS was flat. Excluding one-time deal charges in both years, adjusted EPS was about $2.18 against $2.20 a year ago, even with 1.7% fewer shares.
• Gross margin (sales minus the cost of making the products, as a share of sales) fell to 73.5% from 77.5%. On Merck's adjusted basis it slipped to 81.1% from 82.2%, which the company put down to higher inventory write-downs, mostly vaccines. Higher amortization of bought-in drugs and launch spending absorbed the rest of the growth.

What management guided to

As our Q2 report quoted it, Merck raised and narrowed full-year 2026 sales guidance to $66.3–67.3 billion (from $65.8–67.0 billion), with about 1% help from currency. Non-GAAP EPS guidance fell to $2.66–2.76 from $5.04–5.16, but that cut is the $2.43 a share of Terns costs; net of it, the midpoint edged up about $0.04. Adjusted gross margin was guided to about 81%, down from about 82%, and adjusted operating expenses to $42.0–42.7 billion.

Three things to watch in Q3

1. The first quarter of generic Januvia and Bridion. Januvia and Janumet lost US exclusivity in May 2026 (Janumet XR in July), and Bridion in July. Merck said it expects to lose "a substantial portion" of US Januvia/Janumet sales and to stop selling Bridion in the US in 2027. Together they were $926 million of Q2 sales, about 5.6% of the total. Q3 is the first full quarter of that erosion: the question is how far the combined figure falls from $926 million.

2. Do the launches cover the gap? Winrevair, Welireg, Capvaxive and Ohtuvayre together added about $1.25 billion of Q2 sales. For Merck to land inside its $66.3–67.3 billion range while the generic losses build, these products have to keep growing at rates close to Q2's. Watch Winrevair's growth in particular, now that it is coming off a $588 million base, and the first sales of the newly approved cholesterol pill Lipfendra.

3. Gross margin against the ~81% guide. Adjusted gross margin was 81.1% in Q2 and guided to about 81% for the year, which says management expects the pressure from vaccine write-downs and amortization to persist. A Q3 figure clearly below 81% would mean that pressure is getting worse; a figure back near 82% would suggest Q2's write-downs were partly one-off.

Also on the list

• Keytruda's underlying growth. The first half carried about $250 million of favorable wholesaler stocking that will not repeat, so Q3 Keytruda growth is a cleaner read on demand. Keytruda Qlex ($463 million in Q2) shows how fast patients are moving to the injectable version, which matters once copies of the infused drug arrive.
• Interest and buybacks. Debt raised for the deals pushed adjusted "other expense" to $290 million from $54 million a year earlier, roughly $0.10 a share before tax. Buybacks slowed to $1.6 billion in the first half, with about $3.0 billion planned for the year, so share count will help EPS less than before.
• Any further deal charges. Merck charged $9.0 billion for Cidara in Q1 and $5.7 billion for Terns in Q2. Another single-asset purchase would again be expensed at once and change the EPS guide.

We will publish our analysis of the Q3 results on the Merck company page after the release.