Merck profits beat expectations

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Drugs firm Merck has reported better-than-expected fourth quarter profits.

The US company earned $1.64bn (£1.14bn) for the three months to the end of December, helped by cost controls and sales of its diabetes drugs.

It made a loss of $1.63bn for the same period in 2007, when it took a $4.85bn charge related to a legal settlement for its withdrawn Vioxx drug.

However, quarterly sales were down 3% to $6bn compared to the last three months of 2007.

The firm left its outlook for 2009 unchanged at a time when many companies are either cutting or not issuing forecasts because of economic uncertainty.

Merck shares were up 4.1% at $29.60 before the opening bell.

There is increased competition in the pharmaceuticals market at the moment.

Last week Pfizer confirmed it would merge with smaller rival Wyeth in a deal worth $68bn (£50bn).