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The two largest drugs firms in the world have announced lower net incomes but large increases in revenue for the first quarter of 2010.
Merck and Pfizer took in new revenue from firms it bought out in 2009, although this meant it had to pay out billions for redundancies as well as absorb other costs.
The buyouts are beginning to pay off, however, as both firms have made positive profits forecasts – both Merck and Pfizer exceeded the profit and revenue forecasts of Wall Street, partly because of currency rates.
And on a day when the markets were significantly down, the shares of both companies were up.
Les Funtleyder, an analyst at trading firm Miller Tabak, said “there’s some relief involved” because of the forecasted profits.
Investors are again veering into the pharmaceuticals sector – generally seen as defensive and low-volatility, Mr Funtleyder said, adding that “Merck and Pfizer get an extra boost” to their shares for offering up positive forecasts and exceeding previous ones.
Copyright Press Association 2010