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Pharma Splits on Deal Charges as Merck Raises Revenue and Cuts Profit Guidance

Merck's Keytruda beat came with $14.7 billion of acquisition charges, Pfizer nudged guidance higher on Eliquis, and Williams bought $5.5 billion of gas midstream mid-quarter.

August 4, 2026 Earnings

Merck: the top line is fine, the M&A bill is not

Merck's quarter is a case study in growth bought rather than grown. Revenue rose 5% to $16.61 billion versus $16.36 billion expected, and Keytruda climbed 5% to $8.37 billion — including $463 million from the subcutaneous QLEX formulation, with CFO Caroline Litchfield targeting 30% to 40% adoption by end-2027 ahead of the 2028 patent cliff. Yet the company posted a net loss of $1.34 billion on a $5.7 billion ($2.31/share) Terns Pharmaceuticals charge, and cut adjusted EPS guidance to $2.66–$2.76 from $5.04–$5.16 once a $9 billion ($3.62/share) Cidara charge is included. Revenue guidance went the other way, up to $66.3–$67.3 billion.

What's growing underneath

The newer portfolio is doing its job: Winrevair rose 75% to $588 million, Capvaxive 42% to $184 million, animal health 8% to $1.78 billion, and Gardasil edged past consensus at $1.17 billion. The soft spot is vaccines — MMR and chickenpox sales fell 3% to $592 million on lower U.S. demand, with Litchfield saying the overall U.S. vaccine market has declined. That distinction matters for the sector: it is a market-size problem, not a share problem.

Pfizer's steadier arithmetic

Pfizer beat by $0.09 with adjusted EPS of 77 cents against 68 cents expected, revenue topped estimates on Eliquis demand, and it raised the low end of full-year sales guidance to $60.5–$62.5 billion from $59.5–$62.5 billion. Shares rose 1.8% to $25.50 premarket — off a base more than 50% below the pandemic-era peak, with the company guiding to stronger growth only after 2028. Both Pfizer and Merck are running the same playbook: acquisitions (Pfizer's $10 billion Metsera purchase for obesity) to bridge fading legacy revenue, but Pfizer is not absorbing the charges this quarter.

Energy: Williams buys scale into Gulf Coast gas demand

Williams agreed to acquire Momentum Midstream for up to $5.5 billion — $3.5 billion cash and debt plus roughly $2 billion in equity — picking up more than 4,000 miles of gathering and transmission pipe, about 6 bcf/d of capacity and 140-plus customers feeding east Texas and Louisiana hubs including Gillis. It raised 2026 adjusted EBITDA guidance by $200 million to an $8.4 billion midpoint on the deal, alongside GAAP net income of $827 million ($0.68/share), up 51%. CEO Frank Tsuru's framing — that the sale validates growing domestic and export hydrocarbon demand — lines up with Marathon Petroleum's $5.1 billion quarterly net income and MPLX bringing Harmon Creek III online in August.

Industrials hold up; consumer names wobble

The industrial tape reads constructive: AMETEK posted record sales of $2.04 billion, up 15%, and raised full-year guidance; Timken lifted its adjusted EPS outlook on sales of $1.26 billion, up 7.5%; Broadridge grew recurring revenue 8%, raised its dividend 12% to $4.36 for a 20th straight year, and closed $305 million of sales. Consumer and cyclical results are messier — Kimberly-Clark reported lower profit after a China social media disruption, United Parks missed on both lines, Haverty missed by $0.03 despite EPS doubling to $0.32, and Buzzi fell 9% on first-half results. Westlake Chemical rose nearly 3% on a beat while its partnership vehicle missed on revenue.

The dispersion is the signal

Well over halfway through the season, the striking feature is the size of single-name moves rather than the direction of aggregate results. Revvity beat and raised with the stock jumping, Brightstar beat on profit and reaffirmed guidance on $584 million of revenue and $286 million adjusted EBITDA, Graphic Packaging and Stevanato both edged past estimates, and HSBC profits jumped with buybacks resumed. Reading across: guidance revisions, not headline beats, are setting the price reaction.

Sources

Not investment advice.