Merck KGaA cuts profit forecast for 2011

Merck building
Image caption Merck shares fell after the announcement

German drugs and chemicals firm Merck KGaA has cut its profit forecast for the year after its second-quarter earnings were hit by one-off charges.

Merck faced integration costs related to its two major acquisitions Serono and Millipore, as well as impairment losses related to some drugs and a writedown in the value of some patents.

It now expects an operating profit of 1bn euros ($1.45bn; £880m) for 2011.

In April, it had aimed for a 35-45% rise on last year's 1.1bn euro profit.

'Healthy base'

Merck reported an operating loss of 11.4bn euros for the three months to June, compared with a profit of 326.2m euros a year earlier.

It made a net loss of 85.9m euros in the quarter, against a 183.4m-euro net profit in the second quarter of 2010.

"While a series of one-time charges adversely affected this quarter's profits, this will give us a healthy basis on which our new management team can build," said Dr Karl-Ludwig Kley, Merck chairman.

While it now expects a 1bn-euro operating profit, it said that, excluding one-off items, the figure would rise to 1.4bn euros.

Merck shares were down 5.6% in early Frankfurt trading.

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