Germany’s Merck KGaA raised its 2026 profit guidance after second-quarter adjusted earnings exceeded expectations, supported by stronger demand in its Life Science and Electronics businesses and easing currency pressure.
The Darmstadt-based science and technology group now expects adjusted earnings before interest, taxes, depreciation and amortisation, or EBITDA, of €5.9 billion to €6.3 billion in 2026. Its previous forecast was €5.7 billion to €6.1 billion.
Merck also increased its annual net sales forecast to €21 billion–€21.8 billion, compared with its earlier projection of €20.4 billion–€21.4 billion. The company now expects organic sales growth of 1% to 3%, up from its previous range of zero to 3%.
The revised forecasts marked the second consecutive quarter in which Merck raised its full-year outlook. Management attributed the change to stronger operating performance across the group and lower expected foreign-exchange pressure.
Adjusted quarterly earnings exceed consensus
Merck’s second-quarter adjusted EBITDA rose 9.4% year over year to €1.60 billion, exceeding the €1.53 billion average estimate from a company-provided analyst survey.
Adjusted EBITDA excludes specified exceptional and one-time items. Merck uses the measure to evaluate the underlying operating performance of its businesses.
Group net sales reached approximately €5.34 billion, representing 4.1% organic growth. Organic growth excludes the effects of currency movements, acquisitions and divestments, making it different from reported growth.
Adjusted EBITDA increased by approximately 9.3% organically, reflecting improved performance in the company’s Life Science and Electronics divisions.
Reported net profit declined to approximately €490 million. Higher research and development expenditure and lower licensing income weighed on reported earnings, partially offsetting stronger operating results.
A reliable consensus estimate for quarterly net profit or earnings per share was not available in the supplied information. Those results therefore cannot be classified as having exceeded or missed market expectations.
Life Science and Electronics lead growth
Merck’s Electronics division recorded approximately 12% organic sales growth during the second quarter. The division supplies specialty materials, chemical solutions and production technologies used by semiconductor manufacturers.
Chief Executive Kai Beckmann said rising investment connected with artificial intelligence was supporting demand in the company’s semiconductor business. Advanced AI processors and data-centre systems require increasingly complex chips and specialised materials for their production.
Merck supplies thin-film materials, specialty gases, chemical formulations and other technologies used in advanced semiconductor manufacturing. Demand remained strong as customers continued to report capacity constraints affecting AI-related technologies.
The Life Science division generated approximately 8% organic sales growth. The business supplies products, equipment and services used in scientific research, laboratory testing and pharmaceutical manufacturing.
Demand for materials used in drug production contributed to the division’s quarterly performance. The continued development of biologic medicines and other complex therapies is supporting investment in bioprocessing equipment, manufacturing technologies and research tools.
Merck is also seeking to expand the division through its proposed $11.3 billion acquisition of Bio-Techne, a U.S. life-science tools company. The transaction would be Merck’s largest acquisition in more than a decade.
“The proposed acquisition of Bio-Techne would add additional differentiated capabilities across research, bioprocessing and advanced therapeutics,” Merck said.
The proposed transaction would strengthen Merck’s presence in research products and technologies used in the development and manufacture of advanced treatments. Its completion and subsequent integration, however, remain important execution considerations.
Healthcare faces competitive pressure
Merck’s Healthcare business delivered a comparatively weaker performance as its multiple sclerosis treatment Mavenclad faced growing competition from generic medicines.
Generic competition can reduce the sales and pricing of established pharmaceutical products following the loss of market exclusivity. This pressure partly offset growth recorded by Merck’s Life Science and Electronics operations.
The company is also increasing research and development spending. Higher investment could support the development of future medicines but may constrain reported profitability in the near term.
Drug development remains exposed to clinical, regulatory and commercial risks. Experimental treatments may fail to achieve their clinical objectives, experience approval delays or face stronger-than-expected competition after entering the market.
AI investment supports semiconductor demand
Investment in artificial intelligence infrastructure has increased demand for advanced processors, memory chips and data-centre equipment. Semiconductor manufacturers are consequently expanding selected production capacity and adopting more sophisticated manufacturing processes.
These trends are supporting demand for Merck’s semiconductor materials. The division’s performance will nevertheless remain sensitive to the semiconductor industry’s investment cycle, customer inventory levels and changes in global technology spending.
Foreign-exchange movements also remain an important factor because Merck operates across multiple international markets. Lower anticipated currency pressure contributed to the upgraded 2026 guidance, but renewed euro strength could reduce the value of revenue and earnings generated in other currencies.
Trade restrictions, tariffs and geopolitical tensions could also affect semiconductor supply chains and investment decisions. In Life Science, pharmaceutical funding conditions, research spending and capital expenditure by drug manufacturers will influence future demand.
Merck shares rise after outlook increase
Merck shares advanced approximately 1% by 0936 GMT following the earnings announcement on Aug. 6. The stock had gained nearly 20% since the beginning of 2026.
A directly comparable year-to-date performance figure for an appropriate stock-market benchmark was not available in the supplied information and has therefore been omitted.
J.P. Morgan analysts said the combination of stronger quarterly results and the full-year guidance upgrade could help the shares outperform by “a couple of percentage points.” Jefferies analysts also characterised the quarterly report as strong and expected investors to respond positively to the revised forecast.
Despite the more favourable outlook, Merck continues to face risks from currency volatility, pharmaceutical competition, research and development costs, semiconductor cyclicality and the execution of its proposed Bio-Techne acquisition.
Merck KGaA is a family-controlled science and technology company headquartered in Darmstadt, Germany. It operates through three principal divisions: Life Science, Healthcare and Electronics.
In the United States and Canada, the group conducts business under the EMD name. Merck KGaA is separate from the U.S. pharmaceutical company Merck & Co.
Jeff Berman is a healthcare and medical technology journalist with over 7 years of experience covering the global medtech, biotechnology, pharmaceutical, and healthcare sectors. As a contributor to Just MedTech, he specializes in industry news, market trends, regulatory developments, mergers and acquisitions, and emerging innovations shaping the future of healthcare worldwide. Contact: jeff.b@justmedtech.com.