WHITEHOUSE STATION, N.J. (AP) -- Drugmaker Merck & Co. on Tuesday forecasting a first-quarter profit below Wall Street expectations and said foreign currency exchange will lower its revenue.
The world's second-largest drug company said it expects to earn 52 to 60 cents per share in the first quarter.
Excluding costs related to acquisitions and restructuring, Merck says it will earn 95 to 98 cents per share. Analysts, on average, were expecting $1.01 per share, according to FactSet. Wall Street estimates range from 95 cents to $1.09.
Merck also says unfavorable foreign currency exchange rates will reduce its revenue by 1 to 2 percent in the first quarter.
Merck has for years set low expectations for investors and beat them, impressing the market.
UBS analyst Marc Goodman said the company's outlook means that Wall Street got some of its quarterly forecasts wrong, but Merck's own expectations have not changed. He kept a "Buy" rating on the shares, saying investors have low expectations for the company and it could report positive results for several drug candidates over the next year and a half.
Merck's products include the allergy and asthma treatment Singulair and diabetes medication Januvia. Singulair will lose patent protection in the U.S. in August, allowing other companies to start selling less-expensive generic versions.
Merck reported an adjusted profit of 92 cents per share on $11.58 billion in revenue in the first quarter of 2011. Analysts expect the company's sales to rise 3 percent to $11.9 billion.
The company is maintaining its adjusted profit forecast of $3.75 to $3.85 per share excluding one-time costs. It says revenue will be similar to its 2011 total of $48.05 billion, with foreign currency exchange rates reducing its revenue by 2 to 3 percent.
Analysts had expected Merck to report a profit of $3.81 per share and $47.34 billion in revenue, down 1 percent.
Merck shares declined 30 cents to $38.15 in morning trading.