Merck & Co., Inc. MRK reported fourth-quarter 2017 adjusted earnings of 98 cents per share, which beat the Zacks Consensus Estimate of 94 cents by 4.3%. Earnings rose 10.1% year over year as slightly higher sales, lower taxes and higher other income made up for higher R&D costs in the quarter.

Including a $2.6 billion provision related to U.S. tax reform, fourth-quarter 2017 loss per share was 32 cents compared with a loss of 22 cents per share in the fourth quarter of 2016.

Revenues for the quarter rose 3% year over year to $10.43 billion. Sales, however, slightly missed the Zacks Consensus Estimate of $10.45 billion. Currency movement positively impacted revenues by 1%. Excluding currency impact, sales rose 2% year over year.

Lost sales in some markets due to a network cyber-attack in June hurt the top line. However, sales in the quarter were boosted by the addition of sales from the terminated (December 2016) vaccine joint venture with Sanofi SNY in Europe (approximately $140 million).

Quarter in Detail

The Pharmaceutical segment generated revenues of $9.29 billion, up 4% (up 3% excluding FX impact) year over year as continued strong sales of PD-1 inhibitor, Keytruda and Bridion offset lower sales of key vaccines – HPV vaccine Gardasil/Gardasil 9 in the United States and Zostavax (prevention of shingles). As in the previous quarters, loss of market exclusivity for several drugs also hurt the top line.

Keytruda, the second-largest product in the Merck portfolio, brought in sales of $1.3 billion in fourth-quarter 2017, up 23.5% sequentially and 169% year over year. Sales continued to be driven by the launch of new indications globally. Keytruda sales are gaining particularly from strong momentum in the indication of first-line lung cancer as it is the only anti-PD-1 approved in the first-line setting.

Keytruda is already approved for many types of cancers and treatment settings including lung cancer, melanoma, head and neck cancer, classical Hodgkin’s lymphoma and bladder cancer.