Merck restructuring cuts costs, jobs

Drug Store News, Nov 3, 2003

WHITEHOUSE STATION, N.J. -- Merck & Cos. announced a string of cost-cutting moves.

Merck will slash about 3,200 positions and 1,200 contract or temporary employees, a move that is expected to save $250 million to $300 million annually in payroll and benefit costs.

Restructuring costs related to these actions are estimated to be $140 million to $200 million in the fourth quarter and are expected to reduce earnings per share from continuing operations by 4 cents to 6 cents per share. The balance of the restructuring costs, $75 million to $125 million, will occur in 2004.

The announcement came as Merck posted a 1.4 percent dip in third quarter net income. Net income totaled $1.86 billion, or 82 cents per share, versus last year's $1.88 billion, or 83 cents per share.

Sales in the quarter totaled $5.76 billion versus last year's $5.43 billion. Excluding results from Medco Health Solutions, which Merck spun off in August, income from continuing operations totaled $1.8 billion, up from $1.77 billion in the year-ago period.